ETF Approval Craze Reaches Boiling Point. Is It Today?!?
Technical Take: Bitcoin’s Reaction to Possible SEC ETF Approval.
Bitcoin ETF has been a hot topic for the last few months and there is growing anticipation on social media that the SEC may greenlight a spot BTC ETF this Friday, aka TODAY! This buzz has been partly sparked by a tweet from Grayscale’s chief legal officer mentioning he was “just filling out some forms”.
Adding to the speculation, TechCrunch journalist Jacquelyn Melinek, in a January 4 post on X, hinted at the possibility of multiple ETF approvals. She cited sources “extremely close to the matter”, raising expectations that multiple exchange-traded funds could be approved. She continued with the phrase “expecting something tomorrow” making January 5th a very interesting day.
The enigmatic tweet from Grayscale’s legal head, which has attracted over 1.9 million views has drawn considerable attention. Also, the hashtag #BTCETF and the phrase “Bitcoin ETFs” are trending on social media, especially on X (Twitter). Despite this, some analysts, including Bloomberg ETF expert James Seyffart, are talking down the speculation about a January 5 approval, calling it a rumor. Seyffart anticipates that any approvals are more likely to occur between January 8 and January 10.
The Importance of a Few Days
In the big picture, the exact timing of the approval is not a game changer. Whether one or more ETFs are approved today or early next week doesn’t make a big difference (again, for the big picture).
On the other hand, for traders with open positions, the timing is a lot more important. Some analysts expect Bitcoin to dip after the announcement, even if ETFs are approved. This would play right into the old adagio “buy the rumor, sell the news” but if it comes true, the dip will probably become appealing to buy, especially for people who don’t have Bitcoin in their portfolio. And let’s not forget that ETF approval will open the door to Bitcoin for a lot more people and institutions.
Chart Analysis – BTC/USD
On January 2nd, Bitcoin reached a new high at $45,922 before dropping sharply as low as $41,454. Currently, the pair has erased some of the losses and is trading at $43,635.
The recent price action shows the importance of the resistance at $45,000 but also warns that a bigger drop may follow. The bulls have failed several times to break $45K and this comes after an extended period of rising prices. This type of behavior is usually indicative of a temporary trend reversal or a corrective move (pullback).
If today is the day when the Securities and Exchange Commission (SEC) announces the ETF verdict, we should expect some wild swings. Also, keep in mind that the Non-Farm Payrolls report is due for release later in the day, which could also trigger strong movement.
