The Bitcoin (BTC) funding rate has skyrocketed to an impressive 66%, reflecting the resolute stance of bullish investors keen on retaining their positions. The recent bounce back on January 1st, propelling Bitcoin over $45,000, sets the stage for a new era. Meanwhile, the crypto community now eagerly awaits a potential Bitcoin ETF approval by January 10.
Will we receive the good news soon now or is disappointment lingering? Meanwhile, here’s what you should know about the market right now!
Altcoin Boom Incoming?
According to a recent report from Matrixport, the sustained high Bitcoin funding rate indicates that crypto traders maintain a robust bullish outlook, anticipating the imminent approval of a Bitcoin ETF. As Bitcoin’s dominance drops to 50.3%, signs suggest that a broader altcoin rally is on the horizon, reshaping the crypto landscape.
While fiat-to-crypto inflows, indicated by Tether minting, show no significant uptick, the ongoing price rally suggests a unique market dynamic. Meanwhile, the funding rate, hitting an all-time high at +66%, reveals a financial landscape where long positions pay shorts an annual rate of 66% to hold firm.
The interplay between the futures and spot market dynamics is set to propel Bitcoin beyond the $50,000 threshold for January 2024, as earlier reported by Coinpedia News. Some speculators even entertain the idea of breaching this mark by the end of the current week.
Also Read: The Potential Impact of Bitcoin Spot ETF on Institutional Investors
Bitcoin Halving Anticipation
Market analyst Mike Alfred predicts a significant surge in Bitcoin Miner activity, projecting an explosive upward movement in the next 8 days. This forecast adds an intriguing layer to the ongoing discussions about the potential approval of a Bitcoin ETF.
As the spotlight shifts from the ETF approval chatter, it redirects to the horizon, specifically the upcoming Bitcoin halving event scheduled for April 2024. The surge in BTC miner activity becomes a pivotal element in shaping expectations and speculations about the trajectory of Bitcoin in the short term.
Strategies at play
Matrixport’s report reveals a strategic move by Bitcoin mining companies to limit supply in anticipation of the halving cycles, suggesting a potential supply crunch and a surprising surge in Bitcoin prices. However, the market, driven by scarcity and bullish sentiment, is rewriting the narrative as Bitcoin continues its ascent.
Also Read: Will SEC Approve Bitcoin ETF in the Next 7 Days? Exploring the Probability
A $125,000 Bitcoin Journey
Matrixport’s forward-looking analysis highlights historical trends, signaling a robust BTC rally during halving cycles. Aligning with the US election cycle, BTC’s average return in 2020, 2016, and 2012 was an astounding +192%.
Matrixport speculates this pattern could catapult Bitcoin to its earlier projected target of $125,000, envisioned in July 2023 through Matrixport’s ‘one-year-new-high’ indicator.
The report not only charts the trajectory of Bitcoin but also draws intriguing parallels with the performance of US stocks during election years, emphasizing the potential seismic shifts in the crypto landscape as 2024 unfolds.
