The Bitcoin price saw a spike in volatility due to the decision around the spot Exchange Traded Fund (ETF). Market participants await an announcement at any point during the upcoming days, which will likely result in further spikes in volatility.
As of this writing, the Bitcoin price trades at $43,900 with a 1% profit recorded over the last 24 hours. Over the previous seven days, the cryptocurrency records a 3% increase, acting as the best-performing asset in the crypto top 10 by market cap.
Bitcoin Price Ready For A Massive Rally?
According to many analysts, the potential implications for the Bitcoin price should the spot ETFs get approval are “impossible” for the market to price in this event. Thus, the bullish effects of this approval can only impact BTC in the mid to long-term as capital enters the financial product.
On the other hand, volatility has been susceptible to sudden spikes, as mentioned above. In late 2022, any news related to the Bitcoin ETF moved the market by thousands of dollars, most notably, the report by the crypto news outlet Cointelegraph inaccurately announcing the financial product launch before receiving confirmation from the US Securities and Exchange Commission (SEC).
Developer Samson Mow claims this effect can benefit Bitcoin prices by pushing them beyond expectations. This week, two conflicting reports by analysis firm Matrixport pushed BTC back to critical support levels.
A similar effect might drive Bitcoin back above the $50,000 area. Mow stated:
Bitcoin dropped $5k on some fake news from a no-name analyst. Imagine what happens when a dozen ETFs are approved and start smash market buying. You may think an Omega candle is impossible, but it’s very real.
Confidence In BTC Grows Stronger
In support of the bullish thesis, trading desk QCP Capital pointed at the recent leverage “washed out” triggered by the Matrixport reports. Over $1 billion in long liquidations were triggered as BTC returned to the $40,000 level.
However, the cryptocurrency climbed back and re-took these levels’ mid-area. In a report, QCP Capital stated the following regarding Bitcoin’s potential to see a stronger rally in the mid-term:
For now, the topside remains capped by resistance at the 46 – 48.5k region with support at the 40.5 – 42k region. In spite of the leveraged washout, BTC has climbed back up to 44,000 level. While we remain wary of a “sell the news” knee-jerk reaction to the downside, this resilient price action gives us more confidence in the medium-term bullish view into BTC halving towards Mar/Apr this year.
Cover image from Unsplash, chart from Tradingview
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