Bitcoin Is Up, What Causes The Price Increase?

Today, the price of Bitcoin increased to above $30,000 thanks to a strong upward candle that brought the price to a two-month high. The rise in the price of Bitcoin today follows its holding of the crucial $30,000 mark, which was prompted by changes made by institutional investors to numerous spot Bitcoin ETF applications and by retail investors' optimism over the impending story of half of the Bitcoin supply.

Source: CoinMarketCap

But what causes the drive above $30,000?

A flurry of spot Bitcoin ETF modifications in mid-October helped sustain the price of BTC over $30,000, despite a plethora of macro headwinds, which improved market sentiment.

Numerous sizable institutions applied for exchange-traded funds (ETFs) after U.S. Court of Appeals Circuit Judge Neomi Rao supported Grayscale Investments in its lawsuit against the U.S. Securities and Exchange Commission on August 29. Grayscale won another round on October 14 when the SEC declared it would not challenge this ruling. It's possible that Grayscale filed for a new spot Bitcoin ETF on October 19 as a result of the decision not to appeal.

Despite multiple applications, including those from BlackRock, Fidelity, Cathie Wood's ARK, and 21Shares, which has submitted three applications for approval, the SEC has not yet approved a spot Bitcoin ETF.

What about the Bitcoin Halving?

The next Bitcoin halving is projected to take place in April 2024, and analysts continue to debate whether or not the event will produce bullish outcomes for BTC price this time.

“Through Bitcoin's 14 years of cyclical history, all of its returns and more were accounted for in the 12–18 month period following each Halving. Investing in the 4-6 months prior to each Halving saw even greater 12-month performance in 2020.” Capriole Investments noted.

According to sources, the adoption of a Bitcoin ETF might help address the liquidity problem and create $600 billion in additional demand. According to a recent analysis from Capriole Investments, the approval of a gold ETF caused gold to surge 350% out of a bear market.

Gains in the price of Bitcoin are accompanied by a BTC supply on exchanges that is still below the monthly top of September 4. Since then, exchanges have lost more than 70,000 BTC.

Because traders usually withdraw their Bitcoin when they wish to hold it in self-custody for an extended period of time, the market interprets coins leaving cryptocurrency exchanges as a bullish signal. For the first time ever, long-term Bitcoin owners held 76% of the total BTC on October 19.

Is anything else rocking the boat for Bitcoin?

Prior to remarks made by Federal Reserve Chair Jerome Powell, the price of bitcoin continued to rise, according to data from TradingView and Cointelegraph Markets Pro.

Powell faces a challenging macroeconomic picture with 10-year US bond yields at their highest level since 2007. Powell is scheduled to appear at the Economic Club of New York on Thursday at 12 p.m. Eastern Time.

The main topic of discussion was whether Powell would sound more dovish or hawkish in his remarks, as the 2008 Global Financial Crisis was still very much on market participants' minds.

The day before, asset management guru Lawrence "Larry" Lepard warned X subscribers, "They can't let the bond rout continue."

Prior to several data prints demonstrating inflation continuing beyond forecast, it was believed that the Fed was preparing for a prolonged period of high-interest rates.

The market odds of rates staying at current levels at the Federal Open Market Committee (FOMC) meeting on November 1 were 88%, compared to a meager 11% possibility of a further hike, according to the most recent data from CME Group's FedWatch Tool.

Economist Mohamed El-Erian said on CNBC's Squawk Box that rates shouldn't go up again because that would be better for riskier assets like cryptocurrencies.