Are We Back? Crypto Analysts Split on Bitcoin’s Bull Run

By Mat Di Salvo

Bitcoin may be far below the all-time high of $69,044 it touched towards the end of 2021, but this much is true: It has exceeded expectations in 2023 by surging 86% since the start of the year, when it was trading for less than $17,000. 

The “digital gold” is today trading for over $30,000 per coin as institutional money floods into the market following a number of high-profile exchange-traded fund applications, the launch of a crypto exchange backed by Wall Street big wigs and—according to some—those looking for an inflation hedge. 

But how long will it last? Some experts told Decrypt that investor sentiment has really changed since last year. Others said that fiat liquidity issues mean the top may already be in. 

Liquidity refers to a market’s ability to facilitate conversion between an asset to fiat currency. When liquidity is poor, traders lose money due to events like thin order books, and larger spreads—and there can also be more volatility. 

Crypto trader Pentoshi said on Twitter Monday that he thought a “larger correction” could come if Bitcoin hits the $32,500 mark. He added that this would come as “late longs jump in and people begin to over-leverage”—meaning those opening a long contract now could be taking a big risk.

Right now, traders are longing Bitcoin—and paying a pretty penny to do so. Amberdata’s Director of Derivatives Greg Magadini told Decrypt that traders are paying a premium for upside exposure. “This is the highest level of call premium we’ve seen in the past 18-months,” he added. 

But trader Alex Kruger told Decrypt that although “liquidity matters” it is currently “overrated by market participants.” 

He added that Bitcoin is now largely decorrelated from TradFi (traditional finance) and that the largest digital asset by market cap had jumped by 20% since the the BlackRock ETF application. 

“An SEC approval is very far from being priced in,” he added. “I thus believe that Bitcoin has room to continue running higher.”

BlackRock—which manages $9.5 trillion in assets—applied to the U.S. Securities and Exchange Commission for a spot Bitcoin exchange-traded fund (ETF) three weeks ago. 

Experts said odds were in favor of the firm, which is nearly undefeated when going up against the SEC, at 575-1, as nearly every single one of its ETF applications has received an approval.

This led to the price of Bitcoin to spike—with big money investors taking cash out of short products and plugging them into long ones. 

“We have seen 10 consecutive weeks of outflows from short Bitcoin products, suggesting that sentiment really has swung positive in recent weeks,” CoinShares head of research James Butterfill said. 

“Are we back? It seems so, but the approval of a physical Bitcoin ETF is far from a done deal at this point—we are at least moving in the right direction though.”

While crypto trader, Ryan Scott, told Decrypt that ETF buying in news “is probably priced in for the most part now until an actual decision is made,” adding that the Federal Reserve’s decisions and macroeconomic conditions were probably now more important factors on whether Bitcoin would swing up or down. 

Ultimately, Bitcoin is still a risk asset and is likely—for now—to move in line with what the decisions the Federal Reserve makes.

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