A roundup of reasons driving Bitcoin prices higher at the start of the new year

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Bitcoin started 2024 with a bang, rising about 9% to $45,925, its highest level since April 2022, thanks to a combination of on-chain, fundamental and technical factors.

CME Bitcoin Futures Trading at High Levels

The latest price increase comes ahead of the U.S. Securities and Exchange Commission’s (SEC) decision on multiple spot Bitcoin ETF applications, which could come ahead of formal approvals starting on January 4.

For example, CME Group Bitcoin futures data shows that investors are betting that the price of Bitcoin will rise. As of January 2, these futures contracts were trading approximately $1,300 above the cryptocurrency’s spot value.

BTC/USD daily price chart. Source: TradingView

“Contango” shows that futures traders expect the price of BTC to rise in anticipation of increased demand due to the possible approval of a Bitcoin ETF.

Every asset management company will launch a spot Bitcoin USD This month’s ETFs from Blackrock to Fidelity are essentially long Bitcoin

Yes, technically they don’t have any directional risk, but all else being equal, 10x the price of Bitcoin is 10x the annual management fee

Therefore, as Kang… https://t.co/yXA9HIK26F pic.twitter.com/1icheNFceb

— ChainLinkGod.eth (@ChainLinkGod) January 2, 2024

As a result, traders have been betting that spot prices will eventually catch up to or exceed futures prices in the coming days and weeks.

Bitcoin moves on all exchanges

Net Bitcoin inflows, the difference in the amount of BTC flowing into and out of all cryptocurrency exchanges, turned negative today.

Bitcoin flows on all exchanges. Source: CryptoQuant

For spot exchanges, a drop in net flows indicates increased buying pressure, assuming traders withdraw funds from the exchange for long-term holdings.

The latest decline continues a general trend of gradually decreasing balances across all cryptocurrency exchanges since June, when BlackRock filed for a Bitcoin spot ETF.

This is further evidence that traders are expecting prices to rise in the days leading up to the SEC’s ETF decision and Bitcoin’s 2024 halving.

Reserve Bitcoin on an exchange. Source: CryptoQuant

technological breakthrough

Bitcoin’s price increase today is also part of a bullish continuation setup, known as an ascending triangle.

In an uptrend, the ascending triangle is completed once the price decisively breaks through the upper trendline and rises to its highest height.

Since January 2, BTC price has entered the breakthrough stage of an ascending triangle pattern. This means that BTC price is currently targeting the key breakout target of the triangle below $50,000.