Bitcoin to find support from holders that stand unaffected from recent $86 million liquidation

Bitcoin price almost rallied by 10% on the back of fake news of an ETF approval on Monday before falling back to $28,555.
The second deadline for Fidelity, VanEck and WisdomTree applications is October 17, which will also be delayed.
Despite the $86 million shorts liquidations on Monday, BTC investors managed to make money, with the NUPL, touching a two-month high.

Bitcoin price rise was a boon for many but also a bane for those who witnessed nearly $86 million worth of shorts liquidations. However, the broader market sentiment remains unchanged, suggesting BTC holders are still standing strong.

Bitcoin faces the SEC once again

Bitcoin price, trading at $28,538 at the time of writing, made a splash on Monday following a rise arising from the fake report. The cryptocurrency shot up by more than 10% during the intra-day high before scaling back down to $28,500. This resulted in the market facing $86 million worth of short liquidations.

But even though the truth of the matter was revealed, the ETF saga has not come to an end. The Securities and Exchange Commission (SEC) is set to announce its decision regarding the spot ETF applications of Fidelity, VanEck and WisdomTree on October 17 (today). Based on the comments of Bloomberg ETF analyst Eric Balchunas, the approval is likely going to be delayed until January 2024.

Bitcoin spot ETF deadlines

Should this happen, Bitcoin price will likely remain unaffected with a slightly bullish bias as it is trading at the moment.

The Net Unrealized Profit/Loss (NUPL) indicator, which estimates the total paper profits/losses in Bitcoin held by investors, is highly useful in tracking investor sentiment.At the moment, the NUPL is at a two-month high following the rally from Monday. This suggests that investors are overall in profit and probably optimistic about further recovery but still cautious as a macro bullish signal has not yet been confirmed.

Bitcoin NUPL

This leaves BTC vulnerable to profit-taking as well, which could result in Bitcoin price correcting.

Bitcoin price to see green

Bitcoin price, which is presently hovering above the $28,500 mark, has managed to flip the resistance level of $28,354 into a support floor. This level is important for BTC if it intends to rally up to $30,000.

Since the broader market sentiment is still bullish, BTC has a chance to climb further and breach $29,000. The Relative Strength Index (RSI) suggests that the market is not too far from being overheated, and could be at risk of a correction.

BTC/USD 1-day chart

Even if it corrects, Bitcoin price is likely, at most, to fall back down to $27,418, maintaining a bullish lead. However, should it lose this support as well as that of the 50, 100 and 200-day Exponential Moving Averages (EMA), the bullish thesis would be invalidated, sending the cryptocurrency below $27,000 and towards $26,483.

Cryptocurrency metrics FAQs

What is circulating supply?

The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.

What is market capitalization?

Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.

What is trading volume?

Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.

What is funding rate?

Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.

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