- After surpassing $35,000, Bitcoin price has been consolidating around $34,500 for a while after the bulls held the board.
- This rise in Bitcoin’s value is based on expectations that the first US exchange-traded funds (ETFs) that invest directly in cryptocurrency will be approved in the near future.
- The weekly relative strength index (RSI), a momentum indicator for Bitcoin, recently exceeded the 70 level for the first time since 2021.
The increased likelihood of spot Bitcoin ETFs being approved also increases the Bitcoin price: Could these approvals reduce the BTC price?
How Will Approval of Bitcoin ETFs Affect?
After surpassing the 2023 high of $35,000 earlier this week, Bitcoin price has been consolidating around $34,500 for a while after the bulls held the board.
This rise in Bitcoin’s value is based on expectations that direct investments in the world’s largest cryptocurrency are going to be approved for the first U.S. exchange-traded funds (ETFs) soon. The real question here is whether the actual approval of the ETFs may lead to some investors taking profits.
As a result, Bitcoin continues to test whether the rally will persist with the arrival of the spot Bitcoin ETF in the U.S. market. Hayden Hughes, co-founder of the Alpha Impact social trading platform, told COINOTAG:
“The market has priced in the approval of the Bitcoin spot ETF, and if approved, I expect a ‘sell the news’ event.”
The largest digital currency has risen by 16% this week and even briefly surpassed $35,000, a level it hasn’t reached since 2022. In contrast, global stock markets are struggling in a period of rising long-term Treasury yields and deepening geopolitical uncertainties.
In the midst of the current macro conditions, Bitcoin and cryptocurrencies appear to deviate from other risky assets like U.S. stocks. However, how much further Bitcoin will outpace U.S. stocks remains interesting to see.
BTC: Technical and Derivative Data
Fibonacci ratios indicate potential resistance just below $36,000 for Bitcoin’s turnaround. This area is marked by a 38.2% Fibonacci retracement of a year-long decline in Bitcoin up to November 2022.
The weekly Relative Strength Index (RSI), a momentum indicator for Bitcoin, recently crossed the 70 level for the first time since 2021. RSI readings above 70 are generally considered “overbought,” indicating lower chances for rapid rallies, such as the recent 10% daily gains.
Data from Deribit, the largest crypto options exchange, shows a significant accumulation of bullish bets on Bitcoin hitting $40,000 by the end of the year. This represents a 16% increase from current price levels.
On the other hand, Bitcoin appears to have stolen gold’s thunder in the recent rally. Bloomberg’s Senior Macro Strategist Mike McGlone believes the dynamics between Bitcoin and gold have evolved. Previously, resistance levels between crypto and gold changed by approximately tenfold up to 2020, but the future approval of the U.S. spot Bitcoin ETFs may have the potential to erode gold’s relative status as Bitcoin becomes increasingly mainstream.
