Bitcoin Holds Its Ground—Here's Why Analysts Are Starting to Feel Optimistic

For the first time in three weeks, Bitcoin (BTC) surged above $64,000, before retreating back to $63,450 levels on Friday morning European trading hours, reflecting a 2% increase in the past 24 hours and 10% over the past week.

Ethereum (ETH) followed suit, trading at $2,550, up 5% in the past 24 hours and 9% in the last week.

The momentum has coincided with significant inflows into Bitcoin and Ethereum spot exchange-traded funds (ETFs), adding further fuel to the market’s rally.

According to data from SoSo Value, Bitcoin spot ETFs saw a net inflow of $158 million on Thursday, with Ark Invest and 21Shares’ ETF (ARKB) leading the charge with a single-day inflow of $81 million. Fidelity’s Bitcoin ETF (FBTC) also recorded strong gains, with a net inflow of $49.8 million.

Ethereum spot ETFs also attracted investors, with BlackRock’s (ETHA) ETF posting a net inflow of $5.2 million on the same day, data shows.

While the influx of capital into Bitcoin and Ethereum ETFs suggests growing investor confidence, analysts are expressing growing optimistic about the potential for a continued rally.

In a note sent to Decrypt, Bob Wallden, Head of Trading at Abra, noted that the market is showing signs of a prolonged bullish run.

"Crypto is trading at month's highs, and the market is set for a stronger rally. News flow is bullish, showing consensus that thecurrent trend is just starting," said Wallden. He added that October typically favors Bitcoin and projected that the cryptocurrency could exceed $74,000 by year-end if the current momentum persists.

Meanwhile, the rise in Bitcoin’s price has resulted in a flurry of liquidations.

Over the past 24 hours, 58,848 traders were liquidated, totaling $156.04 million in losses. Short positions were hit hardest, with $105.34 million in liquidations, while long positions saw $50.43 million liquidated, according to CoinGlass data.

Alex Kuptsikevich, Senior Market Analyst at FxPro, told Decrypt that the crypto market’s total capitalization increased by 3.2%, reaching $2.21 trillion and with Bitcoin breaking above $64,000 it is fast approaching a test of the emotionally important 200-day moving average.

He pointed out that surpassing this resistance level could open the door to further gains, with potential targets of $66,000 and $68,000.

Kuptsikevich also noted the surge in Solana’s (SOL) price, which rallied 20% from its lows before the Federal Reserve meeting.

"In the daily timeframe, the coin has consolidated above the 50-day moving average and is approaching the 200-day (around $154) at current levels near $150," he said.

BlackRock, meanwhile in a note highlighted Bitcoin’s role as a potential hedge against geopolitical risks and economic uncertainty. They added that while Bitcoin has shown instances of short-term co-movements with equities and other "risk assets," over the longer term its fundamental drivers are starkly different, and in many cases inverted, versus most traditional investment assets.

“As the global investment community grapples with rising geopolitical tensions, concerns over the state of U.S. debt and deficits, and increased political instability around the world, Bitcoin may be seen as an increasingly unique diversifier against some of these fiscal, monetary and geopolitical risk factors investors may face elsewhere in their portfolios,” BlackRock stated.

Edited by Stacy Elliott.