As Bitcoin trades sideways can the EFT approval catalyze the next rise?
Key Takeaways
- Spot Bitcoin ETFs approval is imminent, according to analysts.
- Bitcoin has been trading sideways for 33 days but that might change soon.
- Chart analysis points out a potential reversal.
The price of Bitcoin climbed above $44,000 on December 5 last year as part of a larger uptrend. But, since then, it moved sideways around this area. It has been 33 days since we haven’t seen some significant price action. But now, as the ETF is on the brink of approval, this could be a catalyst for major price movements.
Would this be a positive catalyst causing a breakout above? Or has the approval of the ETF already been factored into the market, potentially leading to a scenario of “selling the news” and triggering a downturn?
Bitcoin ETF Approval
James Seyffart, a Bloomberg analyst, has recently updated his prediction regarding approving a Bitcoin ETF, raising the likelihood to 95%. His initial forecast was a 90% chance. This optimism comes as the SEC has begun accepting 19b-4 forms from exchanges and issuers, signaling a possible imminent approval of the ETFs. Seyffart’s stance remains positive despite some concerns in the altcoin market and the possibility of a ‘sell-the-news’ event.
The focus is on January 10, when the SEC might announce its decision. Seyffart also discussed the potential consequences if the SEC delays its decision again. He suggested that a rejection could lead to significant challenges, particularly among younger investors, and might prompt a legal and public backlash. He even speculated that the Biden administration might step in despite its current stance on crypto regulation.
Meanwhile, opposition to the ETFs persists. The nonprofit organization Better Markets is pushing for the SEC to reject the applications. A report from Matrixport on January 3 suggested a high probability of rejection, which could lead to a downturn in the crypto market. Additionally, there are rumors that BlackRock plans to invest $2 billion in Bitcoin if the ETFs are approved. The upcoming decision by the SEC is highly anticipated and is expected to significantly influence the crypto market’s direction in the early part of the year.
BTC Price Analysis
If you’ve been following our analysis on Bitcoin, you know that we have repeatedly called for the uptrend from November 21, 2022, to be completed around $40,000, after which we could see the first bull market correction.
The last uptrend started on September 11 last year, when the price of Bitcoin was $25,000. The daily chart shows that December’s high first brought the price to its horizontal resistance zone, which served as support in the previous bull cycle.
Its completion appears imminent, as it did on the assumed wave 5 from the five-wave impulse. Would that mean that the price of Bitcoin is now likely to decrease? According to this count, there are still no signs of a reversal on the price chart.
The only thing that can now suggest a potential reversal is the wave structure and the bearish divergence between the price action and the RSI. So, what could be the most likely outcome?
Bitcoin Price Prediction
Zooming into the 4-hour chart, we can see that the price of Bitcoin has formed another lower-degree five-wave impulse from September 11.
The sideways price action from December 5 has made a slightly ascending triangle, which usually indicates the ending structure in a larger uptrend. However, there might still be room for one more higher high before its full completion.
In correlation with the expected ETF approval in the next two days, we might see an increase initially due to the market sentiment, but this area above $44,000 has served as resistance with strong sellers.
In the market dynamics, sellers ultimately want a better price, so they could withhold their selling while this euphoria lasts. Still, their return could be more aggressive as it fizzles out, resulting in a fast price depreciation, signaling a larger downtrend.
Disclaimers
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
