Bitcoin nears $40,000 in solid weekend rally. ETF approval remains the catalyst

Enthusiasm is quietly building around bitcoin as risk trades improve and interest rates fall. Liquidity is improving and the industry appears to have cleaned up following the fines and Binance and the collapse at FTX.

Bitcoin is up $792 to $39,577, which is the highest since April 2022. It appears to be breaking out after weeks of consolidating near $36,000.

The major catalyst that bitcoin bulls are watching is for a US ETF approval, which looks to be a foregone conclusion. All indications are that it will be approved, with only the timeline in dispute. Recent reporting highlights a window opening up for approvals in the first week of January.

Until it’s approved, I don’t see any reasons for the bulls to sell. Beyond that, there will be need to be a new catalyst or some huge inflows into those ETFs to keep the momentum going. One source of modest momentum is the weakening of the US dollar, something that also boosted gold to a record high on Friday.

Technically, if the $40,000 level breaks, there isn’t much standing in the way of a return to the Q2 2022 high of $49,000.

For broader markets, the lift in bitcoin also points to an extension of the positive momentum into the new week.

This article was written by Adam Button at Source