Bitcoin (BTC) has kickstarted 2024 with a bang, rising approximately 9% to $45,925, its highest level since April 2022 due to a mix of on-chain, fundamental, and technical factors.
CME Bitcoin futures trading at premium
The latest price gains appear ahead of the U.S. Securities and Exchange Commission's (SEC) decision on several spot Bitcoin ETF applications, which might come before the official approval window beginning Jan. 4.
For instance, CME Bitcoin futures data show investors betting on higher BTC prices. As of Jan. 2, these futures were trading at an approximately $1,300 premium to the cryptocurrency's spot value.
This "contango" shows that futures traders expect BTC's price to rise due to anticipated demand increases from a likely Bitcoin ETF approval.
Every asset manager launching a spot $BTC ETF this month, from Blackrock to Fidelity, is inherently long bitcoin
Yes, they don’t technically have any directional exposure, but all else equal, a 10x in the price of bitcoin is a 10x in yearly management fees
Therefore, as Kang… https://t.co/yXA9HIK26F pic.twitter.com/1icheNFceb
— ChainLinkGod.eth (@ChainLinkGod) January 2, 2024
As a result, traders have been betting that the spot price will eventually catch up or exceed the futures price in the coming days or weeks.
Crypto exchange withdrawals rise
Bitcoin's net flows, which is the difference between BTC flowing into and out of all crypto exchanges, have turned negative today.
For spot exchanges, a lower net flow indicates increasing buying pressure, assuming traders are withdrawing their funds from exchanges to hold for the longer term.
The latest decrease continues a general multi-month trend in place since June — when BlackRock filed for a spot Bitcoin ETF — of dwindling balances across all crypto exchanges.
This further suggests traders are anticipating higher prices in the days leading up to the SEC's ETF decision, and potentially into the 2024 Bitcoin halving as well.
BTC price technical breakout
Bitcoin's price gains today is also part of an upside continuation setup called an ascending triangle.
Related: Countdown to US spot ETF: 5 things to know in Bitcoin this week
In an uptrend, ascending triangles resolve after the price decisively breaks above their upper trendlines and rises by as much as their maximum height.
As of Jan. 2, BTC's price had entered the breakout stage of its ascending triangle pattern. This means BTC price is now eyeing the triangle's primary breakout target below $50,000.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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