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Bitcoin's focus will rise above the $48,000 – 50,000 mark
The rally in the crypto market continued on Friday evening. Meanwhile, one Bitcoin (USD) unit cost about $48,200 at its peak. Even on Saturday morning, the initial price was over $47,000. The “Bitcoin Halving” in particular is likely to cast its shadow. Given the ambitious price levels, investors should now brace themselves for the risk of possible pullbacks.
One Month After ETF Approval: Investors Are Back in the Crypto Market
The current price rise is impressive and frightening at the same time. A month after the launch of bitcoin spot ETFs in the United States, investors are increasingly turning back to crypto assets. Funds exiting grayscale ETFs forced downward pressure in recent weeks, and they are now losing momentum. The so-called “Bitcoin Trust” from Grayscale was converted into an exchange-traded fund (ETF) after being approved as an ETF investment vehicle. On January 10, the Securities and Exchange Commission (SEC) approved a total of eleven destination ETFs.
Now ETF investors who are in the profit zone for the first time can come up with a profitable idea. However, the long-term picture still shows an intact upward trend. The number one driving force is likely to be halved.
Investors are currently counting down the days until the “bitcoin halving” and may be taking advantage of one of their last chances to position themselves. This phenomenon is considered an “artificial supply shortage” in investor circles.
Short position liquidation is another possible reason for the price rally
Bitcoin and Co are getting a boost from the more favorable environment for risk assets and the gradual liquidation of short positions. A so-called “short squeeze” can cause rapid price increases. Investors who have bet on falling prices in the past may be forced to close out their short positions.
Focus on the $50,000 mark – profit-taking
Price dynamics show that a significant number of investors are now simply afraid of missing out. It also increases the potential for strong regression. Volatility can be especially pronounced over the weekend, when traditional stock market doors are closed.
Last but not least, recent euphoria should also be cautioned.
The risk of a significant price drop remains. Only a steady rise to the psychological level of $50,000 can generate further momentum.