Bitcoin Bulls in Profit as BTC Price Climbs: Impending ETF Approval Fuels Anticipation

Nearly 50% of the bitcoin supply was profitable at the beginning of last year.

The amount of Bitcoin held in profitable positions is close to 90% as the price surges in anticipation of the approval of a Bitcoin ETF.

CryptoQuant (CryptoQuant)

Bitcoin holders are rejoicing as nearly 90% of BTC supply is now in profit. Prices recently soared past $46,000, driven by growing anticipation of the approval of a U.S. spot exchange-traded fund (ETF), according to data from CryptoQuant. This marks a significant increase from just under 50% at the start of last year.

In 2023, Bitcoin saw a staggering rally of almost 160% and has continued its upward trajectory with a 50% gain in the past six months. Such remarkable performance has brought joy to HODLers (a term used to describe long-term investors) as they soak in the rewards.

El Salvador is a prime example of reaping the benefits of its bitcoin investment. The country recently reported a $13 million profit, thanks to the impressive rally. However, analysts at CryptoQuant have issued a cautionary note, highlighting the risks that high unrealized profits among Bitcoin holders may pose. They warn of a potential sharp price decline despite the strong anticipation for the approval of Grayscale Bitcoin Trust (GBTC) to convert to an ETF. While narrowing discounts between the GBTC share price and its net asset value, as well as increasing trading volumes, indicate positive sentiment towards the spot ETF approval, the potential market correction looms.

CryptoQuant analysts predict a market correction if Bitcoin reaches $48,500, which is the average unit price for those holding crypto for two to three years. In such a scenario, support levels at $34,000 and $30,000 are likely to come into play, serving as potential price anchors. A correction typically refers to a decline ranging between 10% and 20%.

Furthermore, CryptoQuant’s research reveals that the next resistance point for Bitcoin, as indicated by network valuation metrics known as the Metcalfe band, lies at $55,000.

Q&A:

Q: What is driving the surge in Bitcoin’s price? A: The surge in Bitcoin’s price is driven by growing anticipation and excitement surrounding the approval of a U.S. spot ETF. This approval could open the floodgates for increased institutional investment and mainstream adoption of Bitcoin.

Q: What are the risks associated with the high unrealized profits among Bitcoin holders? A: High unrealized profits raise the risks of a sharp price decline. While the demand for Grayscale Bitcoin Trust (GBTC) and narrowing discounts indicate positive sentiment, the potential market correction cannot be ignored. If Bitcoin reaches $48,500, a correction is likely, with support levels at $34,000 and $30,000.

Q: What is the significance of the Metcalfe band in determining Bitcoin’s resistance point? A: The Metcalfe band is a network valuation metric used to analyze the potential resistance points for Bitcoin. According to CryptoQuant, the next resistance point for Bitcoin lies at $55,000, further fueling the excitement and optimism among cryptocurrency enthusiasts.

Looking ahead, the future of Bitcoin remains a subject of great interest. The potential approval of a U.S. spot ETF could serve as a catalyst for even greater growth and adoption. However, it is essential to approach investment decisions with caution, considering the potential market correction in the near term. As the cryptocurrency landscape continues to evolve, staying informed and keeping a close eye on market trends will be crucial for investors.

References:Bitcoin Price | BTC Price Index and Live Chart – Blocking.netBitcoin Price Shoots Past $47,000 Amid BTC ETF Deadline NearingSEC Delay in Spot Bitcoin ETF Approval Adds to the Comments Recently Submitted on S1 FormsBitcoin on the Road to Record Heights: Analysts Forecast Post-Halving Surge

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