Bitcoin Price Speculations if Spot ETF Isn't Approved

Bitcoin has experienced a surge in value amid growing anticipation that the first-ever US exchange-traded funds directly linked to the cryptocurrency will receive approval. However, amid the growing optimism, an important question looms: what happens if the Bitcoin ETF doesn’t meet the lofty expectations set for it?

Bitcoin’s Price Surge Amid ETF Speculation

This week, Bitcoin’s value has increased by 16%, reaching levels above $35,000, a milestone last seen in 2022. This remarkable ascent contrasts with a global stock market struggling due to elevated Treasury yields and deepening geopolitical tensions.

Supporters of digital assets argue that the introduction of spot ETFs by industry giants like BlackRock Inc. will accelerate broader Bitcoin adoption. But the timing of approval from a cautious SEC remains uncertain. Moreover, recent events like the FTX exchange’s bankruptcy have cast a shadow over the broader cryptocurrency market.

Eventually, many researchers & analysts are looking into the other side of the spot. Bitcoin ETF approval 

Analysts Predict Uncertainty Surrounding Approval of Bitcoin Spot ETF

Recently, Bloomberg Intelligence analyst Eric Balchunas anticipates that there may be a gap between the initial hype and the actual demand when a Bitcoin ETF commences trading on a stock exchange. He also notes that the performance of a Bitcoin ETF might not mirror the impressive launch of the first cryptocurrency futures ETF two years ago.

Cici Lu McCalman, Founder of Venn Link Partners, says, “If US spot Bitcoin ETFs are approved, we may see short-term selling. However, these products could be ‘bullish’ for Bitcoin in the long run.

Similarly, JPMorgan Chase & Co. researchers expect the SEC to approve multiple spot Bitcoin ETFs by the January 10 deadline. However, any potential rejection could lead to legal challenges against the SEC, adding another layer of complexity to the regulatory landscape.

Bitcoin’s Overbought Rally

Chart patterns suggest that Bitcoin’s rally may have become overstretched, while options bets indicate that some speculators foresee the potential for Bitcoin to reach $40,000 before encountering significant resistance. As of the latest data, Bitcoin is trading steadily at $34,090.

Technical Indicator Challenge

Fibonacci ratios, often used to identify market reversals, highlight a zone just below $36,000 as a potential obstacle to Bitcoin’s upward momentum. This zone corresponds to the 38.2% Fibonacci retracement of Bitcoin’s year-long decline through November 2022.

Overextended RSI

Bitcoin’s weekly relative-strength index (RSI), a measure of momentum, has exceeded the 70 level for the first time since 2021. A reading above 70 is generally considered “overbought,” suggesting a reduced likelihood of experiencing the rapid rallies seen in the past.

Meanwhile, the future of the Bitcoin ETF remains uncertain, but its approval or rejection by the SEC will undoubtedly have significant implications for the world of digital assets.

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