Bitcoin, the leading cryptocurrency, has reached a new 21-month high, with its price soaring to $45,922. This surge, occurring on January 2, is largely attributed to the growing excitement surrounding the United States' first spot Bitcoin exchange-traded fund (ETF).
Market Buzz Over ETF Rumors
The crypto markets in Asia witnessed renewed enthusiasm as rumors about the impending ETF decision circulated. Speculations suggested that a decision might arrive even before the official approval window, which is set to open on January 4.
This prospect has injected a new vigor into Bitcoin's trading landscape. Crypto analysts and traders are largely in agreement about the impact of the ETF anticipation on Bitcoin's price dynamics. Crypto Tony, in an update to subscribers on X (formerly known as Twitter), pointed to the "anticipation" of the ETF as a driving force behind Bitcoin's recent trajectory.
Similarly, Scott Melker, a trader, analyst, and podcast host, observed that Bitcoin is behaving as if the ETF approval is imminent.
Despite the upswing, analysis of order book changes by Skew, another trader, revealed that some selling was occurring.
However, this activity was relatively low in volume. Skew noted the importance of watching previous high points, such as $44.4K, as potential areas of significance in case of a dip.
Short Sellers and Market Dynamics
Interestingly, despite Bitcoin's significant gains of up to 8% in 2024, there hasn't been a major loss for those betting against the cryptocurrency.
Data from CoinGlass indicates that only $38 million in BTC shorts were liquidated on the day. This contrasts with earlier reports of extremely high funding rates on exchanges, suggesting a widespread belief in a positive market reaction to the ETF news.
The situation for short sellers, especially those who entered the market earlier, has been precarious. Skew remarked that shorts were taken by surprise when Bitcoin exceeded $45,000.
He pointed out that the perpetual swap market was largely unprepared for this upward movement.
"With perpetuals trailing the spot price, there's going to be a feedback loop of volatility, especially around $45K," he commented.