Bitcoin Nears All-Time High as Institutional Inflows Surge

Published on: Oct 22, 2024|4 min read

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London: 22 October 2024 (TraderMade): The cryptocurrency market had a whirlwind week, with Bitcoin's bullish momentum leading the charge. Notably, over 94% of Bitcoin's circulating supply is now in profit. However, the enthusiasm for Bitcoin remains high as Bitcoin ETFs recorded net inflows of $1.9 billion (21,450 BTC) since October 14, reflecting significant positive market sentiment.

In a further boost to the ecosystem, Singapore-based DBS Bank announced new tokenized banking services, showcasing the growing institutional interest in blockchain and decentralized finance (DeFi). Additionally, Avalanche's leading decentralized lending platform, Benq, revealed that crypto-collateralized loans are nearing their liquidation points, a significant development with the potential to shake the market.

Key Takeaways

Institutional inflows into Bitcoin ETFs hit $1.9 billion, driving optimism and signalling further price appreciation.
Bitcoin's open interest in CME Futures reached an all-time high, supported by easing interest rates and bullish market sentiment.

Technical Overview

Bitcoin (BTCUSD)

Bitcoin is showing incredible strength on the technical front. With the U.S. election heating up and uncertainty around global interest rates, Bitcoin is in a different market dynamic compared to prior cycles.

Notably, Bitcoin is benefiting from the U.S. Federal Reserve easing interest rates and a general shift towards scarce assets.

Microstrategy's plans to become a Bitcoin Bank, coupled with SEC approval for options trading on Blackrock's Bitcoin ETF, are major catalysts propelling the market. As we approach year-end, many analysts expect Bitcoin to break its previous all-time high (ATH) of $73,794.

With Bitcoin's market cap at $1.4 trillion, the possibility of it rivalling gold's $18 trillion market cap is becoming a hot topic for speculators.

BTCUSD Chart

Key Levels to Watch:

Support: $53,000 / $55,000
Resistance: $66,000 / $72,000 / $73,794 (ATH)

Downside Risks: The potential for increased volatility as the U.S. election draws near cannot be ignored, with outlier risks like geopolitical tensions or unexpected election outcomes posing threats to the bullish trend.

Ethereum (ETHUSD) Performance

Ethereum is rallying alongside Bitcoin, outperforming it on both 7-day and 1-day returns. While BTC sees more institutional interest, Ethereum continues to shine as the preferred asset for decentralized applications (dApps) and smart contracts, attracting DeFi developers and users alike.

ETHUSD Chart

Key Levels to Watch for ETHUSD:

Support: $2,100 / $2,800
Resistance: $3,600 / $4,000

Derivatives and Volatility Insights

On the derivatives front, BTC and ETH basis rates are at 2-month highs, with Bitcoin's 90-day annualized basis rate up to 10.8% and Ethereum's to 8.9%.

Spotlight: Institutional Developments

Institutional interest remains a driving force, with DBS Bank's tokenized banking suite gaining attention for its smart contract capabilities, offering institutional clients greater access to decentralized finance products.

This aligns with the broader trend of financial institutions entering the crypto space.

Meanwhile, Harris is leading in the US election polls, but betting markets are pricing in a potential Trump victory, which could introduce volatility.

Global Economic Context

Beyond the crypto markets, macroeconomic factors continue to play a significant role. The Australian Dollar strengthened after rate cuts by the People's Bank of China, and global gold markets are trading with high volatility, often likened to "meme coin" behaviour due to their erratic price movements.

Meme Coin Mania and Other Market Moves

In a lighter turn, the meme coin market saw GOAT, an AI-designed token, reach a market cap of $300 million, while SPX6900, inspired by the US stock market, gained attention. These meme coins continue to ride the wave of speculative interest in the crypto space.

What to Watch for Next Week

Bank of England Governor Andrew Bailey's speech at the Bloomberg Regulatory Forum could cause volatility in the markets as traders seek clues about interest rates.
The Bank of Canada's monetary policy report on Thursday could further shape market sentiment.
US Flash Manufacturing and Services PMI data releasing on Friday.

In summary, the crypto market is on the cusp of major developments, with Bitcoin nearing critical resistance levels and Ethereum riding high on positive sentiment. Institutional adoption is growing, and macroeconomic shifts are creating a fertile environment for further price appreciation.