- At $31,431, Bitcoin is at its highest price in 2023. Recently, BlackRock and Fidelity Investments filed applications for a spot Bitcoin ETF and a spot Bitcoin price year-to-date high.
- As Open Interest neared its yearly high, BTC’s rally got a boost from derivatives markets.
- A 13.27% jump in Bitcoin’s value was attributed to a bullish rally last week.
- U.S. spot markets drove BTC’s spot market activity, with Coinbase leading.
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A rally powered by the futures market?
The rally was driven by derivatives markets, according to market data provider Kaiko. During the past few weeks, BTC futures contracts have reached their yearly peak in Open Interest (OI). Moreover, OI rates in BTC reached their highest levels since January 2023.
BTC market capital inflows increased as a consequence of price and OI increases. Additionally, this indicates a greater interest in speculation.
The traders with short positions tended to cover their positions when prices rose in order to limit their losses. Therefore, BTC prices continued to rise.
As Coinglass noted, short liquidations have also increased over the last week. It has been liquidated more than $3 million worth of short positions in the past 24 hours.
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Activities on spot markets are being driven by the U.S
BTC’s recent rally could not be powered by derivatives, despite significant interest in the market. Due to the fact that BTC’s spot to futures volume ratio has been stable for the past three months without any notable spikes or declines, this has led to the increase in its price.
Assets are bought and sold at spot prices. After the two crypto giants were sued by the SEC, Binance’s spot BTC volume has dropped sharply in relation to Coinbase’s.
The volumes of Coinbase BTC grew faster than those of Binance.
Spot trading activity for Coinbase came primarily from the U.S. market since Coinbase is primarily targeted at Americans.
As market sentiment has shifted from ‘neutral’ to ‘greed’ due to institutional players’ interest, BTC bull runs are expected. According to the latest market news, the value of Bitcoin stands at $30,385.95 at the time of writing.
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Rising Production Costs
Bitcoin’s rise can also be attributed to increased mining difficulty as the mining network grows, which increases the marginal cost of producing Bitcoin. In their local currency, bitcoin miners pay a high price for the energy needed. Since Bitcoin’s protocol mandates finding a block every ten minutes, any additional hashing power directed at mining increases mining difficulty, not the rate of generating supply. According to research, Bitcoin’s price tracks closely with its marginal cost of production.
The price of Bitcoin could rise due to liquidations
There was a lower liquidation rate for short-sellers than for long-sellers in June 2023. With over $220 million liquidated in shorts since June 15, the BlackRock ETF filing announcement has turned the tide against short-sellers. BTC shorts have been liquidated over $31 million in the past 24 hours.
Short-sellers are doubling down despite their recent losses. A short squeeze and higher Bitcoin prices could result from 53% of options skewed downward on June 23.
Bitcoin’s price may benefit from the U.S. dollar index
Similarly, Bitcoin prices have risen since the U.S. dollar index (DXY) cooled. Risk assets such as Bitcoin gain in value when the DXY index retracts.
Some market participants think the dollar will lose strength as the dollar’s value continues to fall since the Federal Reserve paused interest rate increases last week. If this occurs, a rise in equities could drive Bitcoin higher along with the equity markets. Bitcoin prices rise as macroeconomic conditions improve.
A close correlation exists between Bitcoin and equity indices such as the S&P 500. Following the Federal Reserve’s pause in interest rate increases on June 14, stocks surged while Bitcoin prices declined. Evidence shows that Bitcoin’s price is catching up with the current rally.
In some markets, the dollar may cool as the U.S. economy grows. The Bitcoin price may rise along with equity markets if this occurs.
Following BlackRock’s announcement and a cooling dollar, Bitcoin price has shown bullish momentum in the short term.
Bitcoin Price Prediction for 2023
| Month | Minimum Price | Average Price | Maximum Price |
|---|---|---|---|
| Jan 2023 | $16,524.33 | $20,032.66 | $23,890.27 |
| Feb 2023 | $35,079.27 | $40,926.16 | $45,298.49 |
| Mar 2023 | $37,337.28 | $41,836.66 | $47,947.12 |
| Apr 2023 | $23,998.32 | $52,220.70 | $60,987.59 |
| May 2023 | $24,495.07 | $46,336.74 | $63,419.62 |
| Jun 2023 | $24,800.88 | $26,647.79 | $61,961.56 |
| Jul 2023 | $24,432.28 | $51,937.58 | $62,999.24 |
| Aug 2023 | $24,875.52 | $30,285.09 | $62,021.85 |
| Sep 2023 | $25,796.21 | $37,553.13 | $62,685.24 |
| Oct 2023 | $23,689.35 | $57,511.79 | $61,780.26 |
| Nov 2023 | $25,381.28 | $28,743.47 | $63,153.58 |
| Dec 2023 | $23,678.22 | $37,479.32 | $61,878.65 |
Bitcoin Price Prediction – 2024, 2025, 2026, 2027, 2028, 2029, 2030
| Month | Minimum Price | Average Price | Maximum Price |
|---|---|---|---|
| 2024 | $61,914.38 | $70,042.60 | $74,378.34 |
| 2025 | $85,056.02 | $100,365.80 | $104,845.93 |
| 2026 | $111,023.78 | $125,833.20 | $132,360.64 |
| 2027 | $111,023.78 | $125,833.20 | $132,360.64 |
| 2028 | $136,965.34 | $155,778.08 | $158,451.89 |
| 2029 | $194,611.0 | $210,212.60 | $216,102.66 |
| 2030 | $281,116.06 | $297,197.79 | $301,302.08 |
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