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13.02.2024

BTCUSD rises due to flows into spot ETFs

BTCUSD hit the $50,000 mark for the first time in more than two years, spurred by expectations of interest rate cuts by the Federal Reserve (Fed) and increased inflows into spot bitcoin-ETFs. The cryptocurrency’s price has risen 16.3% so far this year, although it is far from its peak in November 2021.


The new price rise is partly due to optimism around the approval of bitcoin spot exchange-traded funds (ETFs) in the U.S. This emphasizes its speculative appeal and role as an alternative to the traditional financial system. On January 10, the U.S. Securities Regulator approved the country’s first spot bitcoin ETFs, marking a significant event for the entire crypto industry. The industry had been striving to bring such a product to the market for more than a decade.


Analysts from Bernstein forecast that the flows into the new ETFs will gradually increase and will exceed $10 billion by the end of 2024. According to experts from Standard Chartered, these financial instruments may attract from $50 to $100 billion this year. Other analysts estimate a potential inflow of $55 billion over the next five years.


Expectations of monetary policy easing by the Federal Reserve also play in bitcoin’s favor, increasing the attractiveness of risky assets. The probability of the U.S. central bank cutting interest rates in May is estimated at 62%, according to LSEG’s IRPR app.


BTCUSD quotes are forming a new uptrend on the D1 timeframe. In terms of wave analysis, the price is in the process of forming the third rising wave. The breakthrough of the top of the first wave at the level of 49 000 has already taken place. This may strengthen the bullish movement in the near term.


The Bulls Power indicator volumes (standard values) are holding in the positive zone, indicating an upward movement.


Signal:

The short-term outlook for BTCUSD is to buy.

The target is at the level of 59 000.

Part of the profit should be fixed near the level of 53 500.

A Stop-loss should be placed at the level of 41 860.

 

The bullish trend has a short-term character, so the trade volume should not be more than 2% of your balance.


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