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Bitcoin rises again after testing support, buoyed by ETF

Thu, 14th Oct 2021 11:26

(Sharecast News) - Bitcoin rises again on Thursday, after testing levels close to its support of $53,000 -its previous resistance- and encouraged by the news coming from the US Securities and Exchange Commission (SEC) regarding the expected approval of the cryptocurrency's exchange-traded fund (ETF). With the leader of digital assets above $58,000 again, the green prevails in the 'altcoins', with rises also for Ethereum, which is back above $3,600, while the rest of the tokens have more moderate rises. The total capitalization is close to $2.4 trillion.
Experts agree that news that two of the bidders to launch the first ETF in the queen of cryptos updated their applications gave back hope to the bulls. "Bitcoin is consolidating around the $56,000 level as the cryptoverse awaits a potential SEC update over a Bitcoin ETF on Monday," comments Edward Moya, analyst at Oanda. "Bitcoin was unfazed by the latest inflation report that shows inflationary pressures in the economy remain elevated. Bitcoin is not an inflation hedge today," he adds. Also, the market consensus is betting on a 'buy the rumor' move in the next few days, which will drive the digital asset to reach all-time highs.

That being said, "focusing in on the drama of a fresh ATH is a short-sighted approach," warns Simon Peters, market analyst at eToro. "In the long-term we should see prices increase and eventually a new ATH will come. In the short term we could see some resistance at the $58,000-60,000 level, and potentially a pull-back to boot," he states. "Ultimately investors in crypto should focus on the long-term benefits and use cases of the tokens. Focusing on short-term price movements is a highly risky approach for anyone to take," Peters adds.

But the market's attention is now on how much cryptos will rise because of the expectation around the exchange-traded fund. It was Bloomberg's senior ETF analyst Eric Balchunas who spilled the beans via Twitter by pointing out that there are "good" signs that the investment vehicle will soon be approved. He explained that Ark Invest - owned by Cathie Wood - filed an application for a Bitcoin futures ETF and that Valkyrie updated its own ETF prospectus .

According to Balchunas, companies usually update their proposals when they have everything prepared and "ready to launch," suggesting that Valkyrie could soon receive the green light from the U.S. Securities and Exchange Commission (SEC). The Bloomberg expert also highlighted Ark Invests' Bitcoin futures ETF filing on October 13 in partnership with 21Shares and white-label WhiteAlpha Architect, noting that it was "another good sign" that the SEC is ready to give the go-ahead.

U.S., LEADER IN MINING

In addition to all the above, analysts are monitoring blockchain data, which points to a continued upside for Bitcoin. "Despite China's cryptocurrency ban, it appears that miners, including those who were in China, are keeping their tokens in mining wallets," explains Ki Young Ju, CEO of CryptoQuant, referring to the decline in miner outflows, which tends to be a bullish price indicator.

In other news, following China's crackdown on the cryptocurrency sector, the United States took over the lead in Bitcoin mining for the first time. The Bitcoin network hashrate, the measure of computational resources used to carry out mining activities, rebounded from its July lows, even after China's ban forced miners to shut down their operations in the region. It climbed about 117% to 133 EH/s as of Oct. 12 from its July low of 61 EH/S, according to data analytic´s firm Glassnode.

The new report from the Cambridge Centre for Alternative Finance (CCAF) now confirms that since China's ban, miners from the rest of the world, mainly the US, have taken control of global cryptomining operations. The US accounted for 35.4% of the global hashrate at the end of August, which is more than double the 16.8% at the end of April.

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