Bitcoin ETF Prediction This Week : Exploring the Potential Impact of BTC Price on the Crypto Market
The Bitcoin community is on the edge of its seat as it eagerly awaits the decision from the U.S. Securities and Exchange Commission (SEC) regarding the approval of the first U.S. spot Bitcoin exchange-traded fund (ETF). This development is seen as a crucial milestone in the widespread adoption of cryptocurrencies, and analysts are predicting significant market movements depending on the SEC’s announcement.
The Road to Approval: A 95% Likelihood
Last week, a pivotal meeting took place, bringing together representatives from investment management companies, stock exchanges, and the SEC to review the final amendments to filings for spot Bitcoin ETFs. Confidential sources revealed that executives and delegates engaged with SEC officials concerning the mandatory S-1 prospectus documents required for ETF approval.
Issuers are optimistic about receiving approval for their S-1 filings by mid-next week, following minor adjustments requested by the SEC, including fee disclosures and market-maker identities. The decision from the SEC on the Ark/21Shares ETF is expected by January 10, marking a potential groundbreaking moment for the cryptocurrency market.
Despite the optimism, there remains a 5% chance of rejection. Bloomberg analysts note a decreased likelihood of rejection, attributing it to factors such as Ark’s withdrawal with March assurances, the SEC presenting fewer objections, and reduced intervention possibilities from the Biden administration. However, Better Markets has urged the SEC to reject spot Bitcoin ETPs, citing concerns about potential investor harm due to fraud and manipulation in the Bitcoin market.
Bitcoin Price Forecast: Balancing Optimism with Caution
Analysts predict robust long-term growth for Bitcoin’s price, with Grayscale CEO Michael Sonnenshein suggesting that the ETF could tap into approximately $30 trillion of advised wealth, expanding Bitcoin’s investor base substantially. However, despite the positive long-term outlook, CryptoQuant warns of a possible immediate ‘sell the news’ reaction.
According to CryptoQuant, Bitcoin could experience a decline to around $32,000 next month following the expected ETF approval. This potential dip may be attributed to traders realizing profits, leading to a market correction. The Net Unrealized Profit/Loss (NUPL) metric is currently at 49.4%, heading toward the belief/denial region.
Post-Approval Scenarios: Short Squeeze and Potential Market Slowdown
Upon ETF approval, analysts anticipate a short squeeze in Bitcoin’s price, breaking its $45,000 consolidation phase to challenge the $48,100 resistance level. Long-term holders are expected to gain confidence, quickly surpassing this barrier.
However, caution is advised as the BTC price might experience a slowdown in the $50,000-$52,000 range, with short-term holders likely exiting. Following this, momentum could build again, propelling the overall crypto market value above the $2 trillion mark.
As the crypto world braces for a potential groundbreaking decision, the outcome of the SEC’s ruling on the U.S. spot Bitcoin ETF remains uncertain. While the market anticipates positive movements, the 5% chance of rejection and potential short-term corrections highlight the delicate balance between optimism and caution in the crypto space.
