Crypto wrap: Bitcoin rallies 14%, Ethereum up 11% amid ETF optimism

Bitcoin has surged 14 per cent in the last seven days amid optimism around Bitcoin Exchange-Traded-Fund (ETF). On Tuesday, the largest cryptocurrency by market cap had touched its highest level since May 2022. On Friday, it was trading at $34,134, down from a peak of nearly $35,000, data from CoinMarketCap showed.

 

"The ETF anticipation is driving FOMO among investors who are flocking to Bitcoin as its market dominance grows to 2021 levels," said Rajagopal Menon, vice president at WazirX. Bitcoin's dominance was 53 per cent on Friday.

 

Several investment firms, including BlackRock and Fidelity Investments, have pending applications for bitcoin ETFs in the US, and speculation on their likely approval was fuelled by BlacRock's iShares ETF listing on the website.

 

A Bitcoin ETF is expected to make buying and selling Bitcoin easier through the stock market.

 

A US federal appeals court on Monday also formalised a victory for Grayscale Investments LLC in its bid to create a spot Bitcoin ETF over objections from the US Securities and Exchange Commission. This led to market optimism.

 

"Remarkably, crypto as an asset class has been decoupling from other 'risk on' assets like equities, which corrected sharply due to the rising macro and geo-political instability," added Parth Chaturvedi, investments lead at CoinSwitch Venture.

 

On Friday, the market saw a sell-off but it was majorly due to profit booking. "The crypto market is showing signs of cooling off after the mega rally in the past few days," said Shivam Thukral, chief executive officer (CEO) of BuyUcoin.

 

What to expect?

 

"Bitcoin is moving up by taking support from the 20-day Simple Moving Average (SMA-D). However, it's still facing a challenge at the $35,000 level. If it successfully breaks through, it could reach the $39,000 to $40,000 range, with potential support around $31,000 to $32,000. For Ethereum, the $1,740 level may act as a support, and crossing $1,860 could push it toward $2,000," the crypto exchange CoinDCX research team said.

 

"Bitcoin will now need to break through the $34,300 resistance or risk finding support around $33,800," said Edul Patel, CEO of crypto platform Mudrex.