Over the weekend, Bitcoin’s open interest hit $22.5 billion, suggesting a high level of interest and activity in the market and indicating that traders are bullish on further price increases. The cornerstone of this growing prominence is Bitcoin exchange-traded funds (ETFs), with around 75% of Bitcoin inflows coming from these newly launched ETFs. However, there are concerns that once trading for these ETFs concludes, there could be a negative impact on Bitcoin’s price.
Subsequently, Goldman Sachs raised its S&P 500 target by 10%, reflecting bullish sentiment in traditional markets as reported by Bloomberg. However, Bitcoin faces technical resistance around $53,000 as it seeks $60,000. As a historical accumulation point, many investors may sell at this resistance level, delaying Bitcoin’s rise. If it breaks this level, Bitcoin could gain momentum and approach $60,000 again.
Bitcoin’s price often moves with the S&P 500, showing how closely connected the cryptocurrency market is to traditional markets. Following the Bitcoin rise, Goldman Sachs’ strategists, led by David Kostin, have revised their forecast for the S&P 500, anticipating it to climb to 5,200 by the end of 2024. This adjustment follows the index surpassing the 5,000 milestone earlier this month.
According to Kostin, the main reason for this rise is higher profit estimates. This is a good sign for the stock market’s performance. Goldman Sachs is now one of the most positive companies on Wall Street about the stock market’s future, with this new prediction indicating a 3.9% rise from the current closing price.
Other analysts, including Tom Lee of Fundstrat Global Advisors and John Stoltzfus of Oppenheimer Asset Management, share a similar positive sentiment for the S&P 500’s performance by the year’s end.
Bitcoin’s recent price surge has coincided with a notable increase in open interest, indicating heightened investor confidence in its upward trajectory. However, a significant resistance level looms around $53,200, which is historically challenging for Bitcoin to surpass.
According to an analysis from IntoTheBlock, over 530,000 addresses hold nearly 295,000 BTC bought at the peak price of $53,256. Many of these investors have been holding their Bitcoin since December 2021, facing losses. As Bitcoin nears its break-even price, there’s a possibility it might sell, potentially creating downward pressure on its price.
At the same time, the increase in Bitcoin’s open interest shows that big investors are getting more involved in the cryptocurrency market. While ETFs have helped bring more money into Bitcoin, there are concerns about how they might affect its price. As more big players enter the market, it’s becoming harder to predict what will happen next with Bitcoin.
Bitcoin open interest is at historic highs. Can bulls use the momentum to rise to $60,000?
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