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First Bitcoin-linked ETF surpasses $1 billion in trading volume. BTC approaches new all-time high

Relevance up to 05:00 2021-10-21 UTC–4

This week, Bitcoin is getting even stronger. The launch of the first Bitcoin futures-based ETF in the US is going smoothly, and the price of the number one cryptocurrency is approaching a new record high. Meanwhile, large institutional investors keep buying up more tokens. This positive background is accompanied by rising hashrate and extreme greed in the market. This indicates that after a week of stabilization, the price of BTC is set to test new all-time highs.

Despite all criticism and cautious attitude towards the Bitcoin futures ETF, the debut of the exchange-traded fund was quite successful. On the first day of trading, more than 24 million shares of the ProShares Bitcoin Strategy ETF (BITO) were traded which is equivalent to $1 billion in trading volume. According to Bloomberg, this is the second-best result among all ETFs. Thanks to such a smooth start, BTC managed to leave the channel between $62,000 and $64,000 and is now trying to settle above the selling range. Market euphoria may continue on October 20 as today options on BITO will start trading on the NYSE Arca Options and NYSE American Options. Given a strong start on the exchange, we can expect a similar result on options trading, which may bring Bitcoin closer to its peak levels today.

Amid a successful debut of Bitcoin futures-based ETF and a surge in crypto quotes, the number of large companies interested in Bitcoin is rapidly increasing. Since early October, the number of institutional investors has gone up by 2%. This indicates that the trend of accumulating BTC by major market players has come back. It is very likely that by the end of the current bullish rally, the percentage of institutional investors choosing Bitcoin will reach 70%. Besides, the expansion of large companies that want to invest in BTC at this bullish phase of the market may serve as an additional bullish driver. What is more, this factor will help offset the pressure from speculative holders who began to sell their assets in order to take profit. Massive purchases done by crypto whales can also be traced through the total bitcoin market value and its realized value which slipped below zero and stopped at -9.5%. This means that there was a large purchase of BTC at a rather high price, and most newcomers to the crypto market are now facing losses. Given the current situation and a prolonged rally of the number one crypto asset, market participants believe that the uptrend will continue.

We should not forget that the SEC is set to approve the creation of 7 more Bitcoin futures ETFs. Yet, it is also possible that the regulator will not rush to make this decision after such a successful launch of the first BTC futures-linked ETF. In the meantime, BTC/USD has firmly settled above the resistance area of $59,500 on the daily chart. However, the price still hasn’t broken through the range of $62,000-$64,000. At the same time, the buzz around successful trading in the futures market and bullish signals on the horizontal charts indicate that bulls will attempt to reach the level of $64,000 today, on October 20. After that, the price is likely to stabilize and pass the peak level in pursuit of new records.

Despite an upside movement on smaller time frames, daily indicators start to weaken. The Stochastic Oscillator moved lower and is set to form a bearish crossing in the near term. The Relative Strength Index dropped below the mark of 70 and continues to decline. At the same time, the MACD indicator maintains the upside momentum which signals bullish strength and their attempt to engulf the existing volumes. Given the overbought status of technical indicators this week, increased bearish pressure amid profit taking as well as a prolonged uptrend, BTC is approaching the phase of a local correction. This is also confirmed by the number of unique Bitcoin addresses where the divergence between the price and the number of users has emerged. Bitcoin is likely to start declining after passing its record high and when the excitement in the crypto market reaches its peak.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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