Bitcoin Price Soars To $28,000, Here’s Why – Crypto News – Crypto News
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Bitcoin Price Soars To $28,000, Here’s Why – Crypto News

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The world’s leading cryptocurrency, Bitcoin (BTC), has seen a significant surge in its price today, reaching $28,004. While several factors have contributed to this jump, here are the primary reasons:

#1 SEC’s Non-appeal On Grayscale Spot Bitcoin ETF

Late on Friday night, the market became aware of the US Securities and Exchange Commission’s decision not to appeal the verdict which favored Grayscale’s conversion of the Grayscale Bitcoin Trust (GBTC) into a spot ETF. This decision wasn’t perhaps fully priced in on Friday, as Bitcoin’s price rose by a mere 1.2% on Friday ((followed by a fast retracement), in stark contrast to the 8% spike on August 29 when the initial ruling was announced.

The move signifies the SEC’s potential readiness to green-light a Bitcoin ETF in the imminent weeks. As one Grayscale spokesman pointed out, “The Federal Rules of Appellate Procedure’s 45-day period to seek rehearing has now passed. The Grayscale team remains operationally ready to convert GBTC to an ETF upon the SEC’s approval.”

James Seyffart from Bloomberg Intelligence highlights the probable talks between Grayscale and the SEC in the near future, stating, “Dialogue between Grayscale and SEC should begin next week. Hoping for more info on next steps sometime next week or week after?”

As for when a Spot ETF is coming, Bloomberg Intelligence analysts predict a staggering 90% chance of the SEC’s approval by around January 10.

#2 BTC’s Correlation With Gold

Renowned analyst MacroScope recently provided in-depth insights into the complex relationship between gold and Bitcoin which may have contributed to today’s price move. Gold has soared by more than 6.5% from October 6 till Friday last week, driven by a combination of elements such as central bank policies, the US’s fiscal challenges, and unfolding geopolitical events like the Israel-Hamas war.

Remarkably, the Gold market has been witnessing a discernible pattern: savvy investors, often labeled as the ‘smart money’, have been strategically capitalizing on price dips to augment their long positions. This behavior has been particularly pronounced around the $1820-1860 price marks, suggesting a foundational shift in gold’s pricing trajectory.

Related Reading: Analyst Predicts Next Bitcoin Cycle Top – Is It $89,000 Or $135,000?

This evolving dynamic in the gold market bears significant implications for Bitcoin. Historically, gold often pioneers a trend, with Bitcoin tailing behind to emulate it. This lead-lag relationship, as highlighted by MacroScope, might have been pivotal in forecasting Bitcoin’s move today. As gold appears to be charting a bullish course, Bitcoin, while influenced by its distinct set of catalysts like the spot ETF approval, could be poised to mirror gold’s trajectory.

#3 Short Squeeze

Finally, on a more technical note, there has been significant activity in the BTC futures market that played a part in the soaring price. Thus far today, about $20 million in short positions have been liquidated, the highest amount since October 1, when $37.5 million in shorts were liquidated and BTC rose 4% from $27,000 to nearly $28,100 in a very short period of time.

Bitcoin total liquidations | Source: X @Coinglass

In conclusion, Bitcoin’s impressive surge to $28,000 can be attributed to a combination of regulatory developments, its correlation with gold, the increasing influence of big holders or ‘whales’, and significant futures market activity.

At press time, BTC traded at $27,880.

Bitcoin price
BTC surges to $28,000, 1-day chart | Source: BTCUSD on TradingView.com

Featured image from iStock, chart from TradingView.com

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