What Triggered Bitcoin’s Last Explosion? Glassnode Hints At Another Boom

Bitcoin (BTC) has been making significant strides in recent days, with Glassnode co-founders Jan Happel and Yann Allemann expressing optimism about the cryptocurrency’s future. 

According to their analysis, Bitcoin has broken through crucial resistance levels and is currently poised to strengthen its momentum. Notably, its Relative Strength Index (RSI) has surged above the 70 level, a development that, based on historical trends, could indicate the potential for another substantial upward move.

“The RSI is now beginning to be overbought and could stretch higher toward the 100 mark, as it is the norm with bullish markets. In other words, as long as it sustains the uptrend, the BTC price would be inclined to keep the rally intact,” Happel and Allemann explained.

This RSI indicator is significant in the cryptocurrency market as it helps traders and investors gauge the strength and momentum of the top crypto’s price movements.

Source: SwissBlock

BTC is currently venturing into unfamiliar territory, reaching levels not observed in the past year. Analysts caution that the cryptocurrency’s movement isn’t solely upward, emphasizing the importance of defining critical ranges for advantageous entry and exit.

Short-term support is consolidating around $33,700, with a pivot point at $34,400. In the medium term, there might be a retest of the $32,700 – $33,300 level, with the possibility of high volatility leading to downward fluctuations beneath the current support levels.

Despite this, BTC bulls maintain a strong immediate technical advantage, with an ongoing price uptrend visible on the daily bar chart. Glassnode’s co-founders anticipate BTC possibly reaching $32,700 before a potential further upward trajectory.

As of the latest data from CoinGecko, the current price of Bitcoin stands at $34,938, with a slight 0.5% dip in the last 24 hours. Over the past seven days, BTC has shown a 2.1% rise, reflecting its overall resilience in the face of market fluctuations.

Excitement Surrounds Potential Bitcoin ETF Approval

Simultaneously, the cryptocurrency ecosystem is buzzing with anticipation over the potential approval of a spot Bitcoin Exchange-Traded Fund (ETF). However, not everyone in the industry shares this excitement. Arthur Hayes, the founder of The Maelstrom Fund, has raised concerns about the impact of institutional interest in Bitcoin and the potential consequences of a large-scale ETF.

Hayes paints a scenario where traditional finance giants like Larry Fink and others enter the Bitcoin market and accumulate a significant portion of the freely traded BTC in circulation. This could lead to the creation of Bitcoin mining ETFs, with institutional entities like BlackRock becoming major stakeholders in the mining operations themselves.

BTCUSD currently trading at $35,148 on the daily chart: TradingView.com

Institutional Control And Its Consequences

Hayes’s argument centers on the idea that asset managers such as BlackRock are effectively “agents of the state” and are influenced by government policies. He suggests that if the state needs its citizens to remain within the fiat banking system to facilitate taxation through inflation, it makes sense for institutional entities to hold money in an ETF structure.

In this context, Bitcoin becomes a financial asset rather than a decentralized digital currency. Hayes cautions that if a BlackRock ETF or similar institutional vehicle grows too large, it could have a detrimental impact on the crypto. The reason is that the substantial amount of Bitcoin held within the ETF becomes immovable, essentially removing it from circulation.

Featured image from Freepik