• Bitcoin posts a fresh peak on Friday, just shy of $39,000

• Registers its best monthly close since April 2022

• Besides ETF mania, macro backdrop also aids

On track for a stellar year

Undoubtedly, Bitcoin and cryptocurrencies in general have exhibited impressive performance so far in the year, following a catastrophic 2022. The king of cryptos has gained more than 125% year-to-date, while it has appreciated more than 35% within the fourth quarter. But it is not just Bitcoin, major altcoins have been performing relatively well, with Ethereum being 70% up in 2023.

As the end of the year approaches, it seems that Bitcoin has the perfect setup for a year-end rally. The approval of a spot-Bitcoin ETF, which is believed to spark a wave of institutional demand, appears to be a matter of when not if. Meanwhile macroeconomic releases keep surprising to the downside, prompting markets to bring forward their rate cut expectations globally.

Short-term dynamics

Taking a look at the recent performance of Bitcoin, it is clear that the market seems to be building a base in the past four weeks. Even if the short-term rally has taken a breather, the price also remains unsusceptible to downside risks.

During the past month, crypto investors have been grappling with systemic risks that were supposed to belong in the past. On the one hand, Samuel Bankman-Fried’s trial exposed some dark spots of the industry, while Binance settled a dispute with the US Department of Justice, pleading guilty to anti-money laundering violations.

In 2022, recurring systemic failures had led to a crypto market capitulation, but this time around investors appear unhindered by these risks. On Friday, Bitcoin recorded a fresh 19-month peak of $38,838, without any significant catalyst.

Levels to watch

BTCUSD has experienced a massive surge in the short term, generating a series of consecutive multi-month highs. Although the price posted a fresh 19-month high on Friday, it is just a tad above its previous one, with the bulls appearing unable to conquer the $39,000 mark for now.

Should the price edge higher, the $40,000 psychological mark could provide initial resistance. Surpassing that zone, Bitcoin might face the April 2022 resistance of $42,980.

On the flipside, bearish actions could send the price lower to test the recent support of $36,720 ahead of the $35,00 hurdle.