Bitcoin ETFs: A Tale of Caution and Optimism
BTC/USD – Buy the Rumor, Sell the News?
Ever since it caught the public’s eye, Bitcoin has been a polarizing subject, with harsh critics on one side and vocal adopters on the other. Now that Bitcoin ETFs are approved, the bickering will continue, despite the nod of approval that the Crypto King just received.
Jamie Dimon, the CEO of JPMorgan, recently expressed his skepticism about Bitcoin, advising investors to stay away. His stance is clear: “My personal advice is don’t get involved. But I don’t want to tell anyone what to do. It’s a free country.”
The CEO was rather blunt when asked about his opinion on the recent ETF approvals and the involvement of financial giants such as BlackRock, VanEck, and others. He simply stated: “Number one, I don’t care. So just please stop talking about this.” An interesting statement, considering that JPMorgan is a lead authorized participant in BlackRock’s Ishares Bitcoin Trust.
Jamie Dimon, has been a Bitcoin critic for years, thus his recent opinion doesn’t come as a surprise to anybody. In 2017, he made headlines by calling Bitcoin a “fraud” and comparing it to the Dutch tulip mania of the 1630s.
However, Dimon’s stance has not been consistently negative. Despite his harsh comments, there have been times when he expressed a less critical view and even mentioned at a later time that he regrets his choice of words regarding BTC.
On the flip side, recently, spot Bitcoin ETFs have seen significant activity, acquiring an additional 10,500 BTC on their fifth day of trading. This move demonstrates a growing confidence in Bitcoin as a viable investment option, opposing Dimon’s opinion.
Chart Analysis – BTC/USD
Soon after the ETF approval announcement, Bitcoin skyrocketed to a high of $49,048 before dropping like a rock and now trading near the $40K support. Some have anticipated such a drop, basing their prediction on the old saying “buy the rumor, sell the news”, although most market participants agree that ETF approval is a positive thing.
The pair was overextended and the RSI signaled multiple times that divergence was present. The price was constantly making higher highs, while the indicator was printing lower highs. In other words, we had a combination of technical and fundamental reasons that led to this drop.
Bitcoin’s next move will be largely influenced by the support at $40,000 and a potential bounce-or-break scenario that will take place here. A break of support will bring in additional sellers, possibly extending the drop toward the $38,000 level. On the other hand, a bounce at $40K will face resistance at the 50-day MA. A break of the moving average will increase the chances of uptrend resumption.
