Bitcoin breaks above the psychological $50,000 resistance and aims for $53,000

Bitcoin prices surpassed $50,000 on Tuesday, hitting a maximum since September. Optimists set a target at this precise level, which is the "big test" for the cryptoasset, according to Craig Erlam, an analyst at Oanda, and when it overcomes this challenge, that will send "a wave of optimism to the market". At the moment, the upswing over the past week is 20%, as traders appear to be exiting their short positions.

Technical breakouts from some cryptocurrencies last week triggered "massive hedging" of these positions according to a FundStrat report. Breakouts occur when demand for an asset exceeds supply, causing the price to rise above a certain level of resistance. In the case of Bitcoin, the recent breakout level around $46,000 suggests that traders are starting to exit short positions.

"My composite cycle shows Bitcoin in an upward trend until late November/December before peaking," Mark Newton, managing director and chief technical strategist at FundStrat, wrote in a newsletter last week. "The current weekly cycle shows the potential for weakness through spring 2022 before the next major rally," Newton added. "Therefore, this current rally could prove to be tactical in nature before consolidation sets in and the larger rally could begin next year."

FundStrat has an initial upside target for BTC around $52,000.

The renewed momentum the market is receiving also boosts the prices of large and small-cap altcoins, with rises for virtually all the tokens in the highest-valued 'top 10', with the exception of SOL, Solana's cryptocurrency, which is generating declines. The cumulative figure exceeds $2.15 trillion.

Despite this positive sentiment, investors seem to be waiting for a catalyst that will allow optimists to push the price to the all-time highs at $65,000 in April, which is the target for the rises. "Everything suggests that Bitcoin has set a course for the September highs in the $53,000 area. It goes without saying that above that, it would have a clear path to the annual and historical highs," as stated by José María Rodríguez, analyst at Bolsamanía.

The excuse the cryptoasset lacks to reach these heights could come from the US Securities and Exchange Commission (SEC), which is expected to approve a Bitcoin exchange-traded product (ETF), which could happen in a matter of weeks. Although the agency's chairman, Gary Gensler, reiterated his preference for a futures-backed bitcoin ETF (rather than a physical bitcoin spot ETF) last week, some analysts are predicting that the regulator's approval could trigger a cryptocurrency rally by the end of the year.

For now, the news coming out of the agency is that it has extended the deadline for four Bitcoin exchange-traded funds by 45 days, citing the need for additional time to decide whether to accept the 19b-4 applications. They are the Global X Bitcoin Trust, Valkyrie XBTO Bitcoin Futures Fund, WisdomTree Bitcoin Trust and Kryptoin Bitcoin ETF proposals, whose verdicts have been rescheduled for Nov. 21, Dec. 8, Dec. 11 and Dec. 24, respectively.

Bloomberg ETF analysts recently predicted that the SEC could approve a Bitcoin exchange-traded fund by the end of October, highlighting the ProShares Bitcoin Futures ETF as the most likely candidate. They also advised that the regulator should "allow several at once to avoid spreading the first-mover advantage."