Bitcoin's 'Uptober' Rally Defies SEC Delay On ETF Decision With Remarkable Surge

Bitcoin, the world's largest cryptocurrency by market capitalization, concluded the week with a substantial 6.7% gain, reaching $28,000, significantly surpassing its previous week's closing value of $26,250, despite the U.S. Securities and Exchange Commission (SEC) postponing its decision on certain Bitcoin exchange-traded fund (ETF) applications.

Bitcoin spearheaded the social media trend known as "Uptober" this week when it broke through the $28,000 price level, potentially signaling the commencement of the eagerly anticipated bull market.

The crypto king also established a new record by breaking the September curse and achieving a 4% price gain for the entire month, an accomplishment unseen since September 2016.

Matteo Greco, a Research Analyst at the publicly listed digital asset and fintech investment firm Fineqia International, regarded Bitcoin's recent performance as a "welcome development that provided respite for the digital asset market capitalization following two consecutive negative months in July and August."

The dominance metrics of the crypto asset underscored Bitcoin's leadership in the market uptrend, with its dominance rising to 50.4% from the previous week's 49.9%.

"Bitcoin is leading the charge in this upward trajectory, as demonstrated by the Bitcoin dominance metric, which measures the relationship between Bitcoin's market capitalization and the total digital asset market capitalization. Bitcoin's dominance has increased to 50.4%, up from 49.9% the previous week, showcasing its relative strength compared to the broader digital asset market," Greco said in a note sent to International Business Times.

However, while the price movements are currently "encouraging," trading volumes remained less exhilarating, with daily trading volumes on centralized crypto exchange platforms indicating "limited activity," while monthly trading volumes depicted a 26% decline at $312 billion compared to the $423 billion recorded in August.

"Despite the encouraging price movements, trading volumes remain notably subdued. Daily trading volumes on centralized exchanges, measured over a 7-day span, continue to display limited activity, with the cumulative trading volume over the past week hovering around $10.5 billion, closely mirroring the figures recorded seven days earlier," explained the research analyst. He added, "On a monthly basis, trading volumes on centralized exchanges amounted to approximately $312 billion in September, reflecting a 26% decline compared to the $423 billion observed in August."

Greco also noted that "Low volumes typically coincide with reduced market volatility. This connection is corroborated when examining BTC's 30-day volatility, which has declined to approximately 23%. This marks the third-lowest level recorded since the inception of this metric in 2017."

However, the research analyst remains optimistic that the next two quarters could reignite investor interest in the broader digital asset industry, considering the Bitcoin Halving event and the SEC's final deadline to decide on spot Bitcoin ETF filings.

"Despite several months of experiencing low levels of both volatility and trading volume, the upcoming two quarters hold the potential to become catalysts for the digital asset market, reigniting interest and trading activity," Greco said.

"Notably, these pivotal moments are in close proximity. The final deadline for most Bitcoin Spot ETF approval or rejection is slated for mid-March, closely followed by the scheduled Bitcoin halving in mid-April 2024," he added.

Moreover, the research analyst noted that "the Bitcoin halving event involves a halving of miners' rewards for mining Bitcoin and has traditionally been a precursor to an uptrend in the months leading up to and following the event. Given the confluence of factors, including the SEC's impending decision on ETFs, the focus and anticipation have shifted significantly toward the first and second quarters of 2024."

It should be recalled that the SEC announced last week that it is delaying its decision on certain spot Bitcoin ETF applications.

"The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change, as modified by Amendment No. 3, and the issues raised therein," said the financial regulator.

"The Commission designates Jan. 10, 2024, as the date by which the Commission shall either approve or disapprove the proposed rule change," the SEC added.

Bloomberg's ETF, crypto, and asset management analyst, James Seyffart, expressed the view that the SEC's latest decision may extinguish any hopes for approval of a Bitcoin ETF this year.

As of 11:30 a.m. ET on Monday, BTC was trading up at $28,418.95 with a 24-hour trading volume up by 168.58% at $17.18 billion, representing a 4.64% spike in the last 24 hours and an 8.3% gain over the past seven days.

Based on the latest data from CoinMarketCap, Bitcoin's total circulating supply stands at 19.5 million BTC, with its value up by 4.58% to a 553.42 billion market cap.