The crypto market has experienced heightened speculations in the recent past as more experts forecast a high approval rate for the spot Bitcoin ETFs in the United States.
For the first time since March 2022, Bitcoin (BTC) price rallied above $47k in the past 24 hours, thus signaling the bulls are in control. Having traded above a crucial resistance level of around $44k for the past two weeks, Bitcoin price has now registered a weekly golden cross between the 50 and 200 Moving Averages (MA). However, the flagship coin has reached a major psychological resistance level between $47k and $48k, which could lead to a possible price reversal. Moreover, the inevitable approval of spot Bitcoin Exchange-Traded Funds (ETF) could trigger the sell-the-news narrative in the subsequent weeks.
Bitcoin Traders at Extreme Greed
The high optimism of spot Bitcoin ETF approval in the United States by January 10 has increased FOMO (fear of missing out) traders in the past few months. According to data analysis provided by alternative on the Fear and Greed Index, Bitcoin has registered extreme greed for the past month. Currently, the Bitcoin market sentiment score stands around 76, which is extreme greed. Notably, Bitcoin’s extreme greed tipped over after the instrument surpassed $40k for the first time. A significant rise in Bitcoin greed often leads to sudden price corrections in the short term, thus signaling possible price reversal on the horizon. Legendary entrepreneur Warren Buffett has often noted that investors should act cautiously when the market shows extreme greed and vice versa.
Nonetheless, Bitcoin is a new instrument with a hard cap of 21 million, thus making the possibility of a continued bullish outlook likely. Furthermore, the approval of spot Bitcoin ETF means institutional funds have the green light to acquire the remaining Bitcoins to beat inflation.
Market Outlook
The crypto market has experienced heightened speculations in the recent past as more experts forecast a high approval rate for the spot Bitcoin ETFs in the United States anytime. In the bull case scenario, Bitcoin price is likely to rally towards $50k if the US SEC approves the dozen spot ETFs by tomorrow. Notably, former SEC chair Jay Clayton said on Monday that the approval of spot Bitcoin ETFs is inevitable. Additionally, the current SEC chair Gary Gensler posted a series of X posts cautioning investors on potential risks associated with crypto investments.
1/ Bullish Case
If $BTC rises to $48.5k, the share of 1D to 1W holders is likely to rise above 8%, which indicates an overheated market and reinforces a correction.
$48.5K is the average unit price of 2-3Y holders, and it can create a main resistance. pic.twitter.com/LbRDnlqop5— CryptoQuant.com (@cryptoquant_com) January 9, 2024
From a bearish perspective, Bitcoin price is likely to find a solid support range between $30k and $34k in case the US SEC opts to delay the decision by tomorrow. However, a delay on the spot Bitcoin ETF decision could see the fund managers led by Grayscale Investments, BlackRock Inc (NASDAQ: BLK) file lawsuits against the agency for violating the set laws. Additionally, 2024 is the US election year, which makes a perfect timing for spot Bitcoin ETF approval to help in the campaigning process.
