Bitcoin price breaks $42k, first time since April 2022

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Sign up for our daily newsletter to receive all the essential market news and expert opinions in one convenient place. Get a comprehensive recap of the day's top stories directly to your inbox. The leading cryptocurrency, Bitcoin (BTC), has continued to reach new highs in 2023, spiking to $42,365 in the early hours on Monday, surpassing the $42,000 level for the first time since April 2022.

Analysts at Bitfinex attribute this upward movement to significant buying activity in the market, particularly aimed at absorbing the supply above $37,500, near the upper boundary of its recent trading range. They note that the futures market has shown resilience on downswings, compared to much more muted activity in the spot market, leading to a state of 'perp premium' and a forced closure of shorts that had been accumulated over time in the BTC range from the past few weeks.

This surge in BTC price marks the seventh consecutive week of price increases, demonstrating renewed confidence in the digital asset market, with BTC's price increasing by approximately 55% during this period. As a result of the sharp upswing in BTC price, $150 million in short positions were liquidated over the past twelve hours, amplifying the trend's momentum and facilitating a substantial upward spike with BTC reaching the $42,000 level. Despite the price surge, approximately $50 million in long positions were also liquidated in the past 12 hours, totaling more than $200 million.

Given the current market momentum, a retracement in December is plausible to reduce open interest and leverage before building an upward trend as the SEC spot Bitcoin ETF decision deadline approaches. An approval is expected to bring short-term capital influx from traditional finance investors, fueling the uptrend, while a rejection might trigger a short-term negative price action due to high expectations of approval by market participants. Analysts remain confident, however, maintaining a 90% probability of approval.

At the time of writing, Bitcoin trades at $41,600, an increase of 5.25% on the 24-hour chart. For more market news and expert opinions, sign up for our daily newsletter.