bitcoin price saw an increase in volatility due to the decision around the spot exchange-traded fund (ETF). Market participants expect an announcement any time over the next few days, which will likely result in new volatility spikes.
At the time of writing, bitcoin price is trading at $43,900 with a 1% gain recorded in the last 24 hours. Over the previous seven days, the cryptocurrency recorded a 3% increase, acting as the best-performing asset in the top 10 cryptocurrencies by market capitalization.
Is bitcoin Price Ready for a Massive Rally?
According to many analysts, the possible implications for bitcoin price if spot ETFs gain approval are “Impossible” for the market to set the price in this event.. Therefore, the bullish effects of this approval can only affect btc in the medium and long term as capital enters the financial product.
On the other hand, volatility has been susceptible to sudden spikes, as mentioned above. At the end of 2022, any news related to the bitcoin ETF moved the market thousands of dollars, in particular, the bitcoin/” target=”_blank” rel=”nofollow”>report by crypto news outlet Cointelegraph by incorrectly announcing the launch of the financial product before receiving confirmation from the US Securities and Exchange Commission (SEC).
Developer Samson Mow claims that this effect can benefit bitcoin prices by taking them beyond expectations. This week, two conflicting reports from analytics firm Matrixport sent btc back to critical support levels.
A similar effect could push bitcoin back above the $50,000 zone. Cut fixed:
bitcoin lost $5k on some fake news from an anonymous analyst. Imagine what happens when a dozen ETFs are approved and start making massive purchases in the market. You may think that an Omega candle is impossible, but it is very real.
Confidence in btc strengthens
In support of the bullish thesis, trading desk QCP Capital pointed to the recent “missing” leverage sparked by Matrixport reports. Over $1 billion in long liquidations were triggered as btc returned to the $40,000 level.
However, the cryptocurrency rose again and once again took the middle zone of these levels. in a reportQCP Capital stated the following regarding bitcoin's potential to see a stronger rally in the medium term:
For now, the upside remains bounded by resistance in the 46 – 48.5k region with support in the 40.5 – 42k region. Despite the drop in leverage, btc has risen back to the 44,000 level. While we remain cautious of a knee-jerk “sell the news” bearish reaction, this resilient price action gives us more confidence in the medium-term bullish view that btc will halve towards March/April this year .
Cover image from Unsplash, chart from Tradingview
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