Bitcoin Nears $45,000 Mark; Cryptocurrency Trading Activity Increases

Bitcoin soared to its highest point in four weeks, nearly reaching $45,000 on Thursday, alongside U.S. equity indexes hitting all-time highs. Bitcoin’s price rebounded sharply from a previous low of $42,700 on Wednesday, rising by nearly 5% to hit $44,800, a level unseen since January 11, as per CoinDesk’s figures. “From a technical perspective, Bitcoin has successfully broken out of its previous trading range and now seems poised for an ascent towards a new annual peak above $50,000,” commented LMAX Digital in their morning brief. Crypto ETP expert Laurent Kssis from CEC Capital notes that the recent price surge is leverage-fueled, highlighting a significant $982 million increase in BTC contract open interest within a span of just under a day. Kssis maintains a cautious stance, suggesting the possibility of Bitcoin’s price retesting the $40,000 mark during the weekend. “However, present liquidations seem to imply a modest upcoming rise for BTC, potentially surpassing the crucial resistance level at $45,000.” Meanwhile, Ether too experienced an uptick, rising 3% to reach a two-week peak following Ark Invest and 21Shares revision of their joint spot ETH ETF proposal. The CoinDesk 20, similarly, saw a 4% increase.

January witnessed a consistent rise in spot trading volumes on centralized cryptocurrency exchanges for the fourth month in a row, reaching volumes not observed since June of the previous year, spurred by the endorsement of bitcoin ETFs which reignited interest in the crypto space. escalated, recording a 4.45% increase from the prior month to reach $1.40 trillion according to CCData. Bitcoin’s value surged in anticipation of the Jan. 10 ETF approval but ultimately slid afterward. CCData remarked, “The post-approval pricing dynamics suggest that the ensuing sell-off marked a cessation of the bullish trend that lasted several months.” Binance sustained its position as the top cryptocurrency exchange in terms of trading volume, witnessing a 2.73% increment in January to $473 billion, thus commanding a market share of 31.3%. Nonetheless, Binance has observed a steady decline in its spot market share throughout the year due to mounting regulatory pressures, resulting in the resignation of its founder and CEO Changpeng “CZ” Zhao.

Analysis indicates that Blackrock (BLK) and Fidelity’s spot bitcoin (BTC) ETFs may hold a edge over their competitor, Grayscale, in specific liquidity aspects concerning market depth, according to a JPMorgan (JPM) research report published Wednesday. Despite the reduction of outflows from Grayscale’s GBTC in the fourth week post SEC’s consent, the fund is expected to lose its competitive footing to the novel ETFs, especially those by Blackrock and Fidelity, unless it institutes a significant cut in its fees. Although Grayscale has already reduced its management fee from 2% to 1.5% in light of converting to a spot bitcoin ETF, it remains comparatively expensive against its rivals.