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Over the past seven months, Bitcoin's price gains have often stalled at resistance levels, with the current range between $65,000 and $66,000 being the main barrier.
Bitcoin Price Soars to $67,000
On October 14, Bitcoin also peaked at this level, leading analysts to question whether Bitcoin will establish a sustainable foothold above the threshold this time. This latest price increase, similar to previous price spikes, was driven in part by a boom in the futures market, with increases in funding rates and open interest intensifying this upward movement.
JJ, Head of Derivatives and Options Trading at HighStrike, notes that Bitcoin's rise above the 200-day moving average has caught the attention of options market buyers. He attributed the upward momentum to a variety of factors, including increased odds for Donald Trump on the Polymarket prediction market and the recent rise in MicroStrategy shares, which have hit a yearly high.
However, JJ warned that resistance levels from September remain intact, with large sell orders present on Coinbase. Therefore, even though conditions appear poised to reach new highs in the fourth quarter, traders should brace for volatility and potential pullbacks.
Factors Behind Bitcoin Price Increase
In addition to the growth of the futures market, several other factors contributed to Bitcoin's positive performance. Notably, Kamala Harris, US Vice President, recently announced plans to establish a legal framework for cryptocurrencies aimed at protecting investors, particularly in the Black community. This initiative could encourage greater adoption and stability in the crypto market.
Meanwhile, CryptoQuant CEO pointed to a surge in buying demand on major exchanges, indicating traders' confidence in Bitcoin's future. Currently, buy orders exceed sell orders—a rarity in 2020 to 2022.
Additionally, the liquidity of stablecoins such as Tether (USDT) and USD Coin (USDC), which together have a market capitalization of around $169 billion, has supported the Bitcoin market. The high liquidity of stablecoins makes it possible to quickly purchase Bitcoin, further increasing demand.
Historically, October is a positive month for Bitcoin, and the current state of economic indicators appears to be favorable for the digital asset. Additionally, institutional investors, led by Japan's MicroStrategy and Metaplanet, are diligently pursuing strategies to adopt Bitcoin as a hedge against depreciation of fiat currencies. Recently, Metaplanet announced the acquisition of 106,977 Bitcoins worth approximately 1 billion yen (approximately $6.69 million), bringing its total holdings to 855,478 Bitcoins.
As Bitcoin navigates these critical price levels, the coming days will be crucial in determining whether Bitcoin can sustain its gains amid market uncertainty.