Bitcoin Price Steady As Spot ETF Ignites Fresh Buzz, Climb to $50k Imminent or Brace for a Tumble?
The crypto industry is almost reaching the pinnacle of the optimism building towards the approval of spot Bitcoin ETFs. Although this widespread hype sustained the Bitcoin price rally since October to highs above $45,000 in January 2024, BTC was hit by sudden volatility on Wednesday leading to a sharp dive through liquidity at $40,000. The largest crypto had recovered and traded at $43,400 during US business hours on Thursday.
The sell-off makes the fifth-largest drop in a day in BTC over the last 12 months. According to analyst James Van Straten, short-term investors transferred nearly “$1 billion worth of Bitcoin to exchanges at a loss.” This was the fourth-largest loss in the last year.
Yesterday was the fifth biggest one-day drop in #Bitcoin in the past 12 months.
Short-term holders sent almost $1b worth of #Bitcoin to exchanges at a loss, the fourth biggest loss in 12 months. On Jan 2, we saw the third biggest profit taking in over 2 years.
Lettuce hands,… https://t.co/BkC1SJAFBj pic.twitter.com/18pPaleuJ9
— James Van Straten (@jimmyvs24) January 4, 2024
A report by Matrixport saw Bitcoin price tumble sending panic across the board. Ethereum plunged from its highest level in 2024 at $2,400 to $2,100 while one of the leading performers among altcoins, Solana slipped below $100 and touched lows at $85 before bouncing back to $100.
In the report analysts at Matrixport insinuated that the Securities and Exchange Commission (SEC) will reject all spot Bitcoin ETFs. They listed several reasons for such an outcome including the agency needing more time, unfulfilled requirements, and lack of political motivation.
However, investors seem to have jumped on the opportunity to buy the dip backing the rise from $40,000 to $43,400. If holders can block out the uncertainties, and keep seeking exposure to BTC, the price could gain momentum above $45,000 and start clearing the path to $50,000.
Recommended for you: Top Altcoins Price Prediction Jan 2024: Buy or Sell
Bitcoin Prediction: BTC $50k Target Imminent or Pipe Dream?
Bitcoin price sits on top of support provided by the 200 Exponential Moving Average (EMA) (in purple) at $42,040. With this support secured BTC has a higher probability of increasing towards $45,000.
However, a four-hour candle close above the 50 EMA (in purple) at $43,336 is required to steady the uptrend and reduce the chances of pulling back. Slightly above this level, bulls will also be required to brave the resistance at the 20 EMA (in blue) at $43,547 to validate the uptrend.
Despite a sell signal in the Moving Average Convergence Divergence (MACD) indicator trying hard to invalidate the uptrend, persistence from the bulls could transform the MACD into a buy signal, further reinforcing the bullish outlook.
The approval of a spot Bitcoin ETF in the next few days would be the catalyst to blast Bitcoin price above the ascending triangle and complete the target to $50,000 before the end of January.
Meanwhile, blockchain data by IntoTheBlock suggests that long-term holders are concentrating on accumulating Bitcoin, which they are likely to sell as the coin approaches the bull market top.
Prior to the bull market, long-term holders accumulate Bitcoin consistently and they only start selling as we approach bull market tops🐂
Currently, long-term holders are still accumulating. Explore these patterns through our Bitcoin Cycles Perspective.
🔗https://t.co/qWhryCeM0D pic.twitter.com/9QYdWQ9y1g— IntoTheBlock (@intotheblock) January 4, 2024
Rising Bitcoin demand fuels the current rally, which could further explode if spot BTC ETFs are approved. To back their offerings, ETF operators would enter the market, boosting the inflow of capital and sustaining the upward momentum.
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