Bitcoin experienced a substantial upswing, reaching $36,856, the highest level since May 2022. Bitcoin dominance, fueled by growing expectations of approval for ETFs to invest in the leading cryptocurrency, highlights the crypto market’s sensitivity to regulatory decisions.
The Bitcoin ETF Anticipation and Market Impact
Analysts from Bloomberg Intelligence, James Seyffart and Eric Balchunas, point to a critical eight-day window for the US Securities and Exchange Commission (SEC) to issue approval orders potentially. Even if the approvals don’t materialize this month, analysts believe there’s a strong 90% chance of approval by January 10. Following a decade of regulatory deliberation, this optimism has contributed to Bitcoin profit with a 120% surge in 2023.
Caroline Mauron, Co-founder of Orbit Markets, notes sustained interest in betting on a further Bitcoin rally. In contrast, global stocks have seen a more modest 10% rise during the same period. The ETF expectation serves as a catalyst, adding momentum to the current rally. Analyst Josh Gilbert from eToro highlights that beyond the ETF trigger, bets on the US Federal Reserve’s pause in rate hikes and an upcoming Bitcoin-halving in 2024 are additional factors fueling the rally.
Cryptocurrency Market Dynamics
As Bitcoin’s bull run continued, other tokens followed suit, with smaller tokens like Ether and Solana posting gains. Notably, the rally occurs against the backdrop of the Terra and Luna tokens sparking a significant market rout last year, wiping out $1.5 trillion in crypto market value.
Seyffart provided a detailed list of BTC-spot ETFs, including their filing status and approval deadline dates. Notable entries include Hashdex Bitcoin ETF and Franklin Bitcoin ETF, facing a first deadline on November 17, 2023. The final deadline for these ETFs’ decisions is set for May 30, 2024.
Market Reactions and Technical Analysis
The latest developments ignited buyer appetite, propelling BTC to an early high of $36,598, with Ethereum reaching $1,926. Technical analysis reveals that BTC holding above the 50-day and 200-day EMAs suggests a potential move toward $40,000. However, a fall below $36,000 could expose lower support levels. Therefore, traders might wonder how to sell Bitcoin with maximum profit.
For Ethereum, holding above key EMAs and a bullish crossover signal optimism. An ETH break above $1,926 could trigger a move to the $2,021 resistance level. However, caution is advised as a fall through the trend line might bring the $1,805 support level into play.
The 14 daily RSI reading of 81.08 indicates Bitcoin dominance, emphasizing the significance of favourable BTC-spot ETF-related news in sustaining the current momentum.