As the Asian trading session kicked off, excitement returned to the crypto markets with Bitcoin reaching a 21-month high on January 2nd. Data from TradingView indicated a strengthening in Bitcoin’s price as the New Year holiday period concluded, with BTC/USD hitting $45,922 on central exchanges amidst renewed enthusiasm for the United States’ first spot Bitcoin exchange-traded fund (ETF).
Rumors surrounding the ETF, which is expected to start its official approval process on January 4th, continue to dominate headlines, including potential decisions prior to the formal review. Investors were not left wondering about the source of the recent price surge in Bitcoin. Crypto Tony shared his expectations for the ETF approval with his followers in an update.
Investor, analyst, and podcast host Scott Melker summarized the situation by suggesting that Bitcoin is trading as if an ETF approval is imminent. Trader Skew, analyzing order book changes for BTC/USD, noted some selling activity but remarked that it remained relatively quiet in terms of volume.
Despite Bitcoin gaining up to 8% in value in 2024, investors betting against it did not suffer significant losses. According to the latest data from CoinGlass, only $38 million in Bitcoin short positions were liquidated at the time of writing. Analysts had previously highlighted excessively high funding rates on exchanges and widely believed that ETF activity would spark an upward trend.
Meanwhile, the total liquidations in the crypto futures market amounted to $62 million. Skew pointed out that previous short positions were caught off guard during the move above the $45,000 level, and perpetual swap investors were unprepared for a higher leg.
Skew also suggested that the futures market was not sufficiently exposed to the current movement driven by the spot side, implying a potential volatility feedback loop around the $45,000 mark in the futures market, which follows the spot price.
