Bitcoin price did not need fake Spot BTC ETF news to break $29,000 barrier
- Bitcoin price shattered the $29,000 barrier, recording an intra-day high of $30,207 before a pullback.
- Last time Bitcoin price made such a move was on October 16, steered by fake news of spot BTC ETF application approval.
- Foray is attributed to Jerome Powell’s speech, hinting at a possible pause in interest rate hikes at its next meeting.
Bitcoin (BTC) price has recorded higher highs and higher lows over the past week, beginning October 12, amid growing buying pressure. On October 16, the price exploded with a significant margin, coming on the back of what proved to be false reports, but investors have not relented.
Bitcoin price surges even without a spot BTC ETF approval
Bitcoin (BTC) price is trading with a bullish bias, recording an average of five green candlesticks in the last eight days. Out of the five, two instances stand out for significantly testing the $29,000 psychological level, that is on October 16 and on October 20.
The strong move north on October 16 followed false reports that the US Securities and Exchange Commission (SEC) had approved BlackRock’s iShares spot BTC exchange-traded fund (ETF). Though it was later confirmed to be false, Bitcoin price had already made a 10% surge on the news to record an intra-day high of $30,000 before a quick retraction to a candlestick close of $28,495 on that day. BTC was not able to hold above $29,000 to put it plainly.
Fast-forward three days, and on October 19, the US Federal Reserve held a meeting at the Economic Club of New York where Federal Reserve chair Jerome Powell delivered a speech. Around the same event, Bitcoin price is up almost 8%, comfortably holding above the $29,000 level at $29,565 at the time of writing. Like on October 16, BTC tested the $30,000 psychological level before pulling back, but managed to stay above $29,000.
BTC/USDT 1-day chart
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Bitcoin price breaches $29,000 after Powell’s speech
Bitcoin price did not require fake news to shatter the $29,000 barrier. All indications point to Powell’s speech as the source of hindwings for the BTC pump on October 20 that saw the flagship crypto breach $29,000.
In his speech, Powell spoke of the rising yields on long-term US treasuries. He also hinted that the Federal Reserve could see its way to pausing its interest rate hikes during the next meeting, slated for November 1.
Notably, the expected pause hinges heavily on inflation data, such that inflation suddenly shooting up could delay the pause and more rate rises could come. On the other hand, if inflation does not rise, then the pause could go into effect.
For the layperson, a Fed pause differs from a Fed pivot, with the latter happening when the Fed starts bringing interest rates back down again. Notably, such a reality may still be distant, not to be expected anytime soon. The more plausible scenario is interest rates staying at their current levels for a while.
On the other hand, a Fed pause could be a step in the desirable direction. In fact, a pause tends to predate a pivot.
Analysts’ thoughts about Bitcoin price volatile move higher
One analyst has commented on the “relative outperformance” of Bitcoin price relative to safer alternatives, challenging that an ETF remains a crucial influencer to drive prices.
BTC relative outperformance (esp vs some very "safe" assets) is flashing on the screen of every money manager with a pulse. Anyone who thinks an ETF wouldn't matter doesn't know the psychology in that world. Funds want the option to allocate but need a way that's easy and…
— MacroScope (@MacroScope17) October 20, 2023
Based on their opinion, ‘access’ and ‘on-ramps’ mean nothing during a bear market, but could amplify and self-reinforce price movements during bullish seasons.
Author
Lockridge Okoth
FXStreet
Lockridge is a believer in the transformative power of crypto and the blockchain industry.
