Bitcoin has broken out and hit a yearly high of around $39,900. This increase has led market observers to believe that the price could soon exceed $40,000.
The latest price rise follows a speech by Federal Reserve Chairman Jerome Powell in which he pointed to continued restrictive interest rates until inflation approaches its 2 percent target.
Is the next Bitcoin price at $40,000?
After Powell’s speech, Bitcoin hit a 19-month high, buoyed by market optimism and speculation about the Fed’s future direction. Some analysts watching this uptrend believe that Bitcoin could break $40,000 and head towards $50,000.
In a note to investors, Markus Thielen of Matrixport assumed that the probability of Bitcoin reaching $45,000 is 90%. He attributes this to market positivity and the possible approval of a spot exchange traded fund (ETF).
“As we enter the last month of the year, we remain optimistic. “Historically, Bitcoin tends to rise +12% in December, which is in line with our year-end target of $45,000 for Bitcoin in early 2023, which now seems likely,” Thielen wrote.
Bitcoin price development. Source: TradingView
In recent months, traditional financial institutions such as BlackRock have been seeking a spot Bitcoin ETF from the US Securities and Exchange Commission (SEC). This development, coupled with the active engagement of the SEC, raises expectations of an imminent Bitcoin ETF approval.
Read more: How to Prepare for a Bitcoin ETF: A Step-by-Step Approach
Notably, Grayscale is preparing for such approval by appointing John Hoffman, formerly of Invesco, to lead its Bitcoin ETF efforts. At the same time, Grayscale’s Bitcoin Trust’s discount to its net asset value has narrowed significantly, according to data from Coinglass.
BTC on-chain indicators are turning bullish
The bullish sentiment is further strengthened by on-chain data indicating a significant withdrawal of Bitcoin from exchanges. According to Glassnode, more than 37,000 BTC have been withdrawn from exchanges since November 17th.
This trend is widely viewed as a bullish signal, indicating a shift towards long-term holding and less selling pressure.
Bitcoin balances on exchanges. Source: Glassnode
Additionally, the recent price surge has taken Bitcoin holders to their most profitable level since December 2021. Data provider IntoTheBlock notes that over 80% of Bitcoin addresses are now held for a profit.
“Over 80% of Bitcoin addresses are currently held for profit. “This is the highest since December 2021, when prices were above $50,000 per Bitcoin,” IntoTheBlock said said.
Percentage of Bitcoin holder addresses in profit. Source: IntoTheBlock
Since this data was collected, Bitcoin has seen further gains, suggesting an even higher percentage of profitable addresses.
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