Bitcoin’s price has recovered from Wednesday’s dip amid uncertainties surrounding the spot Bitcoin ETF. There’s potential for a surge to $50,000 if the SEC approves the ETF.
The cryptocurrency industry is on the verge of heightened optimism surrounding the potential approval of spot Bitcoin ETFs. This widespread enthusiasm has fueled the Bitcoin price rally, propelling it to highs above $45,000 in January 2024. However, the sudden volatility on Wednesday caused a through liquidity at $40,000 for BTC. Despite this setback, the largest cryptocurrency had recovered and was trading at $43,400 during US business hours on Thursday.
Bitcoin Faces Sharp Sell-off Amid Spot ETF Uncertainty
Bitcoin witnessed its fifth-largest single-day drop in the past 12 months, with a sudden dive causing concern across the cryptocurrency market. Short-term investors reportedly moved nearly $1 billion worth of Bitcoin to exchanges at a loss, marking one of the most significant losses in the last year. The sell-off was triggered by a report from Matrixport, suggesting a potential rejection of all spot Bitcoin ETFs by the Securities and Exchange Commission (SEC). The report cited reasons such as the need for more time, unfulfilled requirements, and a lack of political motivation.
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 (@jvs_btc) January 4, 2024
The market reaction was not limited to Bitcoin, as Ethereum also experienced a drop from its 2024 high of $2,400 to $2,100. Solana, among the top-performing altcoins, slipped below $100, touching lows at $85 before rebounding to $100. Despite the uncertainties surrounding spot Bitcoin ETFs, some investors saw the sell-off as an opportunity to buy the dip, leading to a recovery from $40,000 to $43,400. If holders can navigate the uncertainties, there’s potential for Bitcoin to regain momentum, aiming to surpass $45,000 and pave the way toward the $50,000 mark.
Bitcoin Faces Critical Levels Amid Spot ETF Anticipation
Bitcoin’s current price stance hovers atop the crucial 200 Exponential Moving Average (EMA) support at $42,040, providing a foundation for potential upward movement toward $45,000. To solidify the uptrend, a four-hour candle closure above the 50 EMA at $43,336 is essential, accompanied by overcoming resistance at the 20 EMA at $43,547.
Bitcoin price chart | Tradingview
Despite a sell signal from the Moving Average Convergence Divergence (MACD), persistent bullish efforts could transform it into a buy signal, reinforcing the positive outlook. The approval of a spot Bitcoin ETF in the coming days could serve as a catalyst, propelling Bitcoin above the ascending triangle and targeting $50,000 by January’s end.
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
Blockchain data indicates that long-term holders are accumulating Bitcoin, possibly preparing to sell as the coin approaches its bull market peak. The ongoing rally is fueled by rising Bitcoin demand, and the potential approval of spot BTC ETFs could attract significant capital, sustaining the upward momentum.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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