Bitcoin hits $35,000 mark for first time since May 2022; what's next?

Bitcoin hit $35,000-mark on Tuesday after about a year-and-half. The expectations of approval by US Securities and Exchange Commission (US SEC), stock market regulators in the United States, to directly invest in the cryptocurrency pushed the largest digital token to rise 20 per cent in a week, and its highest levels since May 2022.

The crypto market is struggling to find some ground after the prolonged crypto winter which kicked off in late 2021 on the back of a series of crypto projects failure and liquidity crunch in the global economy. However, the past week brought some good news for the enthusiasts of the new-age asset class.

Traders were confident that the Securities and Exchange Commission would approve an exchange-traded fund (ETFs) in coming months. The prospect of a spot Bitcoin ETF is seen driving broader flows into the cryptocurrency, as it would allow a wider set of investors to buy exposure without directly trading it.

However, Bitcoin retraced to $34,000 following the removal of the BlackRock Bitcoin ETF from the DTCC's website and subsequent reappearance. ETF ticker, IBTC, from the Depository Trust & Clearing Corporation's (DTCC) website.

In the past 24 hours, Bitcoin surpassed the $35,000 mark, primarily due to the ticker of BlackRock's Bitcoin ETF (IBTC) being listed on the DTCC, which hinted at a potential SEC approval. This development drove Bitcoin to achieve a new yearly high with strong market demand, said Edul Patel, Co-founder and CEO at Mudrex.

The key catalyst for this surge was BlackRock," he added. Along with it, rising inflation and Grayscale’s application to convert its GBTC to a spot ETF will be reconsidered by the SEC might have also induced bullishness."

The bolestered mood in the crypto market pushed the other crypto tokens higher as its largest peer Ethereum surged about 15 per cent to top $1,800-mark, while Solana jumped 30 per cent in a week. Other altcoins including Chainlink, Mina, Injective were up 50-90 per cent in a week. The overall optimism in the digital token space pushed the crypto mcap close to $1.3 trillion.

Vikram Subburaj, CEO at Giottus Crypto Platform said that the expectations of mass adoption of Bitcoin (BTC) as a safe haven investment akin to Gold is around the corner has excited crypto enthusiasts.

"The rally has been fuelled by a positive development with regards to its spot ETF approval in the US – BlackRock’s iShares Bitcoin trust got submitted and listed into the depository trust  clearing corporation with the official ticker marked down as $IBTC, bringing the ETF one step closer to reality," he said.

BlackRock's (BLK) spot Bitcoin ETF ticker, IBTC, was temporarily removed from the Depository Trust & Clearing Corporation's (DTCC) website. However, the ticker was relisted after a few hours but sparked the speculations above the approvals regarding the Bitcoin ETFs.

Bitcoin has entered a bullish midterm zone after a breakout of the level of $31,500, said Patel from Mudrex. "As long as the price maintains itself above this threshold, the bullish sentiment is expected to outmuscle the bearish forces. Consequently, there is a prospect of witnessing additional upward movement, potentially reaching the range of $36,000 to $38,000," he added.
 
Bitcoin is trading above its 50-day and 200-day exponential moving averages and are currently consolidating after their recent upward momentum.

It is noteworthy that Bitcoin dominance of crypto market cap has increased to 54 per cent – a level not seen since April 2021. This likely indicates that there is a strong rotation of capital to the number one crypto asset as total crypto market cap has not put in a new high this year yet, said Subbarao from Giotuss.

"Bitcoin has pulled back to near $34,000 today, which was expected after such a meaty rally. As long as it holds $33,000, the possibility of taking out $35,000 again remains strong in the near term," he said

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.