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Time for a New Bitcoin Rally: Can BTC Price Reach New All Time High?

Published October 24, 2023 11:15 AM
Nikola Lazic
Published October 24, 2023 11:15 AM

Key Takeaways

  • Bitcoin is up by 38% from September 11.
  • There are some fundamental factors behind the rise but the price spike was due to liquidations.
  • There is more upside potential in the short term.

Since its peak at $31,800 on July 14, Bitcoin experienced a downturn, briefly dipping below the $25,000 mark on September 11. A subsequent recovery saw it climb to $28,000, but it faced resistance, quickly retracing to $26,500 by October 11.

This drop, which undercut the prior high of $27,300, initially signaled potential weakness. However, contrary to bearish expectations, Bitcoin rallied impressively.

Today, it peaked at $35,180, marking a 33% surge from its October 11 low.

By surpassing its July high, Bitcoin has indicated that the broader trend, which began on November 21 of the previous year, is bullish. This shift suggests that the bull market may well be underway.

Currently, with Bitcoin maintaining its upward momentum, further short-term gains seem plausible. But the pivotal question remains: As Bitcoin embarks on this new bullish phase, is it on the path to set a new all-time high?

What’s Driving The Rise?

There are different factors that have inflicted a positive sentiment on Bitcoin in the previous period. When we talk about the general sentiment the most important factor might be the anticipation of the Bitcoin ETF approval. 

A pivotal court decision favored Grayscale, enhancing the likelihood of its Bitcoin Trust (GBTC) transitioning into an ETF. Additionally, BlackRock’s progression in its bid to list a Bitcoin ETF has bolstered optimism among investors.

Its proposed product appeared on the Depository Trust & Clearing Corp. website, accompanied by a unique ID number. While this doesn’t signify an outright approval of the ETF, some market observers interpret this move as an indication of BlackRock’s optimism toward securing approval.

Amidst the backdrop of the current war crisis, impending recession, and other macroeconomic challenges, there appears to be an increased demand from investors for Bitcoin.

But when we are talking about Bitcoin price parabolic rise in the previous weeks and today, the driving force behind it was a sequence of short-squeezes. 

Number of short liqudations

Per Cryptoquant data,  the number of short liquidations in USD reached $73,5 million on October 16. This was the highest amount of liquidations we have seen last time on June 21. Later when we examine the price chart, we are going to point out why this happened at this particular time. 

As the price made a higher high on October 23, another major short-squeeze occurred with the number of short liquidations at $36,2 million. 

BTC short liqudations

Coinglass data , suggests a more dramatic picture. As the derivatives market data aggregator shows the number of shorts liquidated yesterday, October 23, has been higher than on October 16, reaching $161 million compared to $84.8 million. 

These two short squeezes occurred at two significant price points where it was expected that the price of Bitcoin would make a downturn. October 16 was the point of a minor rise (at the time), which should have been a corrective move and resulted in a larger decline, which is what we were expecting as well. 

short liquidations time

As the price continued past this point and made a higher high to its October 2 these short positions were liquidated, creating a cascading effect. The second significant short liquidation even occurred at the levels of its yearly high made in June and July, as the majority believed that Bitcoin would form a double top and make a downturn.  

BTC Price Analysis 

In this section we are going to talk about why Bitcoin could have showed with this rise that it started its new bull cycle. First, let’s revisit the bearish count in which Bitcoin could have continued for a new bear market low, and discuss why this is now out of the question. 

Bearish scenario invalidated

The most important date in this sense is June 18 last year. This is the point from which the bull market could have begun. But instead of the recovery from there showing a bullish structure, we have seen a lower low on November 21. 

This is why there was still a chance that the rise from June 18 until August 14 was wave A, and the decline to November 21 was wave B, making the rise from there throughout this year wave C. In this scenario, from June 18 we could have seen an ABC correction as the lower degree wave from the higher degree wave 4. Wave 5 was expected with the potential to bring the price of Bitcoin as low as $11,000.

The possibility of doing so was present until August 14 when Bitcoin came up to $30,700. But that chance started to look slim later in July when it made a higher one of $31,800, although not entirely invalidated and is the reason why we have primarily been expecting the start of the larger descending move from July. 

Now that this new high was made, this is entirely invalidated. 

bull cycle signaled

Undoubtedly, the surge from November 21 emerges as an independent five-wave impulse, distinct from prior patterns. This has led us to interpret it as the inaugural bullish movement of the emerging bull cycle.

Bitcoin’s price trajectory remains ascendant, with its culmination yet to be seen. The next pivotal resistance zone looms at approximately $40,200. Once this bullish phase concludes, we anticipate the inaugural correction of the bull market, which should set the stage for the first significant higher low, denoted as wave 2.

By projecting the potential endpoints for waves 1 and 2, wave 3 seems poised to match the previous all-time high. This suggests that wave 5 could very well establish a new record peak.

Whether this marks the culmination of the bull cycle or if further ascents await remains speculative. However, extrapolating from the current overarching five-wave movement, a price target of around $82,000 seems plausible.

Disclaimer

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.

 

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