The market rallied hard on the expectation of the imminent spot Bitcoin ETFs approval, then some more on news of BlackRock’s iShares Bitcoin Trust ticker $IBTC listed on the Depository Trust & Clearing Corporation (DTCC) – Nasdaq trade clearing firm. A day later, the ticker disappeared from that ETF list, damping speculation that a spot Bitcoin ETF could be just days away from approval. But what now – where does the market stand to date, and what can one expect?
From a technical analysis perspective, reportedly (PDF), Bitcoin came at the monthly resistance level, which very well can be broken, of course, with weekly and monthly closes in the coming days, but shouldn’t be ignored.
As such, pursuing the market at this point, after such a FOMOed move, might present a less-than-optimal risk-to-reward ratio. The market’s doing well, but it’s climbed a lot already, so at the moment, it doesn’t seem like a good moment for taking a descent trading position after refusing to do so lower.
On the non-technical side, ETF speculation has ramped up a lot in the past week. Although the deadline for this isn’t until early next year, many experts seem to be fairly confident the ETF approval is just around the corner.
At this stage, it’s unclear whether the approval will actually lead to a market sell-off. If speculative activity keeps driving up prices, that sell-off could become a reality once approval is confirmed. But if there’s a period of stagnation or minor sell-offs while the market’s still doing well, that could signal more growth spurred by the ETF news.
Another aspect worth mentioning is that large sums of money are expected to flow into Bitcoin from various asset managers, potentially amounting to trillions of dollars. Over the long haul, this will naturally adjust the price of Bitcoin.
The higher retail interest and prices climb in anticipation of the ETF, the more cautious one should be about a market correction. Basically, if the market keeps going up until the announcement, one should be prepared for some dip shortly thereafter.
With that in mind, the best strategy this time would be to buy the rumors (early) and then buy the dip after the news (whenever it comes).
Altcoins. Altcoins are heating up, they say, however, the Bitcoin Market Cap Dominance index speaks for itself: now is a period of capital flowing in BTC first, and some later, it usually started distributing into altcoins.
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