Bitcoin ETF Approval News Won’t Lead to Crypto Market Rally As Per Options Data

The first of 2024 is going to be pretty exciting for Bitcoin investors and the entire crypto community which has been eagerly awaiting the launch of the first spot Bitcoin ETF in the US. As per the latest reports, the U.S. SEC could be contacting the Bitcoin ETF applicants earlier next week.

Bitcoin ETF News Won’t Lead to BTC Price Rally

Despite the news that Bitcoin ETFs are coming by Tuesday, January 2, there’s little volatility across the market. Also, the options data suggest that the market has already priced in the Bitcoin ETF news and there isn’t much rally ahead in sight.

In the latest market update, options data from Greeks.Live suggests that despite rumors of the SEC approving the Bitcoin Spot ETF application next Tuesday, there has been minimal volatility in both major term implied volatilities (IVs) and prices.

Analyzing the options data, it’s noted that the implied volatility for Jan12 options, which is closely linked to the ETF, experienced a decline rather than an increase. Additionally, the trading volume for these options was notably low, constituting only 2% of the day’s overall turnover, a level of activity seldom seen.

This data implies that the market may have already factored in the potential approval of the ETF, and even if the approval occurs, it might not lead to significant price increases. The subdued options activity suggests a level of anticipation and caution among investors, potentially indicating that the expected approval has been priced in, limiting the potential for substantial returns.

BTC Price Gains Capped On the Upside

At press time, the Bitcoin price is trading at $42,255 with a market cap of $827 billion. Probably the news of Bitcoin ETF approval can provide little thrust to the upside. However, analysts believe that the gains would be capped on the upside.

Popular crypto analyst Michael Van de Poppe suggests that despite the market’s anticipation of a Spot ETF approval, the upside for Bitcoin appears to be relatively capped. He envisions a scenario where the cryptocurrency might reach a peak in the range of $48,000 to $52,000. Following this potential peak, he anticipates a period of relative calm with sideways and range-bound price action until a new all-time high (ATH) is achieved, which he predicts could occur in late 2024.

The analyst’s viewpoint underscores a cautious approach to the immediate price trajectory of Bitcoin, taking into account the impact of the Spot ETF approval and forecasting a measured and potentially stable period for the cryptocurrency before a resurgence towards new record highs in the future.