Bitcoin experiences a surge amidst signals from the ECB and Franklin Templeton's ambitious ETF plans.
Bitcoin (BTC) witnessed a 2% boost on Thursday in response to the European Central Bank's (ECB) announcement. The ECB indicated that its recent rate hike may be the last in a series of ten consecutive hikes.
The central bank increased three key interest rates by 0.25%, with the main deposit facility rate now at 4%, up from -0.5% in June 2022. Market analysts were already speculating on the likelihood of another rate hike in September.
The current rate, however, falls short of matching inflation, projected to average 5.6% in 2023. These revised projections are a result of an anticipated rise in energy prices. Despite easing indicators, underlying price pressures persist.
Tightened financing conditions are also affecting demand, a critical factor in returning inflation to target levels. The ECB expects a substantial contraction in euro area economic growth, slowing to 0.7% this year and 1.0% in 2024.
Since last year, rising interest rates from the European Central Bank, the Federal Reserve, and other monetary authorities have washed away investment in risk assets such as stocks and cryptocurrency.
Bitcoin briefly rose above $30,000 in March 2023 when the Federal Reserve introduced its Bank Term Funding Programme (BTFP) as a liquidity lifeline for banks threatened by the bankruptcy of Silicon Valley Bank that month.
Global investment firm Franklin Templeton has thrown its hat into the ring for a Bitcoin exchange-traded fund (ETF). The company recently submitted its plan to the SEC, outlining a Bitcoin ETF in collaboration with Coinbase as the custodian.
The ETF will be traded on the Cboe BZX Exchange, with pricing relying on the CME's CF Bitcoin Reference Rate–New York Variant.
This move follows the SEC's delay in decisions on spot ETF applications from various prominent firms. Additionally, a crucial court ruling mandated the SEC to consider Grayscale's request to transform its Bitcoin futures ETF into a spot ETF.
Franklin Templeton's application for a Bitcoin ETF acknowledges the regulatory uncertainties surrounding digital assets in the US. It highlights the potential impact of adverse legislative or regulatory changes on the value of Bitcoin and related products.
Such changes could encompass measures like restricting or banning Bitcoins, mining activities, digital wallets, and services associated with Bitcoin trading and custody.
As per CoinStats, Bitcoin is currently trading at $26,610.21, up 1.65% in the last 24 hours, with a live market size of $519B. It has a circulating supply volume of 21,000,000 BTC coins and a maximum supply volume of 21,000,000, with a 24-hour trading volume of $19B.
Bitcoin is showing a strong bullish trend, breaching the significant $25,900 resistance, which is accentuated by a negative trend on the daily chart.
It just flew over this, reaching a high of $26,500, which now serves as substantial resistance owing to a double top pattern.
BTC, on the other hand, was unable to hold above $26,500 and fell to $26,000, hovering above its new support of $25,900.
The RSI and MACD are in the purchasing zone, and the 50-day exponential moving average indicates bullish momentum as long as BTC remains above $25,600.
Dips below $25,400 and $24,950 could lead to support. Breaking through the $26,500 resistance level could lead to targets of $27,000 and $27,500. In conclusion, the $26,500 level is critical for Bitcoin's next moves.
Bitcoin's response to both the ECB's rate hike and Franklin Templeton's ETF pursuit underscores its resilience in the face of evolving financial landscapes. As central banks and investment firms navigate the complexities of monetary policies and digital asset regulations, Bitcoin continues to stand as a focal point in the broader financial conversation.