Bitcoin (BTC) price has been on a roller coaster ride in the past few days, reaching a new all-time high of $38,000 on Thursday, only to drop below $37,000 on Friday. The top cryptocurrency is facing strong resistance near the $38K level, while the bears are testing the key support level of $37K.
According to the BTC price analysis by CryptoPotato, the $37K level is crucial for Bitcoin to maintain its bullish momentum and avoid a deeper correction. If Bitcoin fails to hold above this level, it could slide down to the next support levels of $36,200 and $35,000. On the other hand, if Bitcoin manages to break above the $38K level, it could target the next resistance levels of $39,000 and $40,000.
The BTC price analysis also suggests that the technical indicators are mixed, with the daily RSI showing overbought conditions, while the MACD is still bullish. The trading volume has also decreased in the past 24 hours, indicating a lack of buying pressure.
Bitcoin ETFs fuel the rally
One of the main drivers of the recent Bitcoin rally is the anticipation of the approval of Bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC). The SEC has a deadline of Nov. 14 to approve or reject the first Bitcoin futures ETF application by VanEck, followed by several other applications by Nov. 18.
Many analysts and investors are optimistic that the SEC will approve at least one Bitcoin ETF this month, which could boost the demand and adoption of Bitcoin by institutional and retail investors. A Bitcoin ETF would allow investors to gain exposure to Bitcoin without having to buy or store the actual cryptocurrency.
According to Bloomberg Intelligence, the approval of a Bitcoin ETF could trigger a rally to $100,000 by the end of the year. The report also states that the Bitcoin ETF market could reach $50 billion in assets under management in the first year of trading.
Bitcoin dominance remains high
Another factor that supports the bullish case for Bitcoin is the high level of Bitcoin dominance in the crypto market. Bitcoin dominance measures the percentage of the total market capitalization of Bitcoin compared to the rest of the cryptocurrencies. A high Bitcoin dominance indicates that Bitcoin is outperforming the altcoins, while a low Bitcoin dominance indicates that altcoins are gaining ground.
According to CoinMarketCap, the Bitcoin dominance is currently at 53.5%, which is near its highest level since May 2021. This shows that Bitcoin is still the leader and the most preferred asset in the crypto space, despite the emergence of many new and innovative projects.
However, some analysts believe that the Bitcoin dominance could decline in the near future, as the altcoins catch up with the Bitcoin rally. For instance, Rachel Lin, the CEO and co-founder of SynFutures, said that the altcoin market has increased by over 10% in the last seven days, with some coins like Cardano, Solana, and Binance Coin posting double-digit gains.
Lin also warned that Bitcoin could face a correction soon, as the daily RSI is at its highest level since January 2021, indicating overbought conditions. She said that the Bitcoin supply is also limited, as 90% of the Bitcoins in circulation have not moved for over three months, leaving only 10% for the new entrants to chase.