Bitcoin prices have risen today, experiencing some modest gains and fluctuating close to the $38,000 level, which market expert Scott Melker singled out as being of key importance.
“$38,000 is a key level of resistance, as this was the price where Bitcoin was trading before the LUNA collapse,” Melker, a crypto investor who is the host of The Wolf Of All Streets Podcast, noted via comments provided via direct message through X, previously known as Twitter.
“Breaking above this area effectively erases the contagion of 2022,” he noted.
The price of bitcoin has risen more than 100% this year, but it is worth emphasizing that even at this level, it is still far below the all-time high of more than $60,000 it reached in late 2021.
When explaining the digital currency’s latest price movements, analysts who provided input for this article pointed to multiple factors.
Brett Sifling, an investment advisor for Gerber Kawasaki Wealth & Investment Management, listed several variables that may have helped fuel today’s gains.
“First, it remains very correlated to the U.S. tech market which has rallied sharply over the past few weeks with a ‘risk on’ attitude with hopes of a soft landing from Fed interest rate policies,” he wrote in comments submitted through e-mail.
“Second, there was the Binance/CZ news that was digested nicely by markets and viewed by some crypto investors as a net-positive, as it seems like we are turning the corner on the recent bear market blunders caused by these illegal dealings and can bring some accountability to the industry,” stated Sifling.
“This increased accountability also bodes well for the next reason, which is the continued hopes of a Bitcoin ETF approval in the near future,” he said, referring to the anticipation that the U.S. Securities and Exchange Commission will authorize a spot bitcoin exchange-traded fund in the coming months.
“Lastly, the Bitcoin halving is now right around the corner and market participants have noted this as a major catalyst in past bull market Bitcoin runs,” said Sifling, referring to an event which is expected to happen in April 2024.
Tim Enneking, managing director of Digital Capital Management, also spoke to this development, as well as how many market participants are responding to hopes that the SEC will soon provide a green light for the first U.S. spot-based bitcoin ETF.
“Bitcoin is having a moment because of the four-year halving cycle (even though that would indicate a huge bull market in 2025, everyone knows that and is trying to front-run it in one way or another) and because of ETF rumors (which appear to have some basis in fact),” he wrote in comments sent in via e-mail.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and SOL.