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Bitcoin Reaches 20-Month High On Expected ETF Approval, Rate Cuts

Bitcoin surpassed $42,000 on Monday as investors believe a spot ETF will likely be approved and U.S. interest rates were cut.

Bitcoin pushed past $42,000 on Monday on spot ETF enthusiasm.
Credit: Getty Images

A combination of factors pushed bitcoin past $42,000 on Monday. With the SEC likely to approve a Spot Bitcoin ETF and the Federal Reserve cutting interest rates, the world's largest cryptocurrency rose to a 20-month high. Specific legal issues and rising confidence in the altcoin market also led to the zenith.


Prospect of Spot Bitcoin ETF Approval


The U.S. Securities and Exchange Commission (SEC) is expected to soon approve exchange-traded spot bitcoin funds. This anticipation has been a significant catalyst for the price increase. Such an approval could open the bitcoin market to millions more investors, potentially leading to a substantial capital influx.


Market and Regulatory Developments


Bitcoin showed a clear uptrend in its trading patterns. Overcoming key resistance levels in the $30k area in late October, it entered a period of consolidation. Analysts observed an ascending triangle pattern on the daily chart, indicating strong buying pressure. This technical momentum has contributed to the rising confidence among traders and investors​​​​.


Legal developments, such as Judge Rao’s decision deeming the SEC's argument against a spot BTC ETF as ‘unlawful’, have also had a significant impact. This decision is seen as a pivotal moment, akin to historical events in the gold market, and is expected to have long-term positive effects on Bitcoin's price​​.


Other Market Developments


The fading of negative news from 2022, such as the FTX crisis, and recent favorable court opinions have improved market sentiment. Significant institutional interest in a spot BTC ETF in the U.S., along with structural changes like the upcoming Bitcoin halving and new financial accounting standards, are providing additional support for Bitcoin's price​​​​.


The overall cryptocurrency market, including altcoins, also experienced a positive trend, with approximately two-thirds of the top 200 tokens recording gains. This broader market movement reflects a growing confidence in the cryptocurrency space as a whole​​.

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