Boosted by sentiment over the approval of spot Bitcoin ETFs in the United States, Bitcoin topped $47,000 during Monday's U.S. stock trading session, hitting a nearly 20-month high, and the last time BTC traded above $46,000 was in April 2022.
Bitcoin prices topped $47,000 at around 2:15 p.m. ET on January 8, according to Bitui terminal data. The 24-hour gain is 6.85%.
Crypto-related stocks also rose in response. Coinbase edged up nearly 2%, Iris Energy and Marathon Digital rose more than 7%, Riot Platforms rose 6%, and CleanSpark rose 5%.
Coinglass data shows that the 24-hour liquidation of short positions in Bitcoin exceeded $89 million, and that number is still increasing as of press time. The amount of crypto short liquidations across the network exceeded $150 million.
As the market eagerly awaits the SEC's decision on multiple ETF filings, expectations are high that it will have a profound impact on institutional engagement and overall market dynamics.
The rally comes as BlackRock, Grayscale, and other potential Bitcoin ETF issuers filed final updates with the SEC, including key fee disclosures, which boosted investor confidence in the likelihood of approval. On Wednesday, the SEC's deadline to approve or reject ETFs is approaching, and industry experts widely expect the agency to approve several applications at the same time to balance the playing field.
Jim Angel, an associate professor at Georgetown University's McDonough School of Business, told CNBC: "It's a price war, with multiple applicants coming out with almost identical commoditized products, and the only way they can compete is on price." ”
Jay Clayton, former chairman of the U.S. Securities and Exchange Commission, said on CNBC's "Squawk Box" on Monday: "Approval is inevitable. There is nothing more to decide. ...... This is a big step forward not only for Bitcoin, but also for the financial industry as a whole. ”
Optimism around Bitcoin drove Ethereum up 3%. Several companies vying for Bitcoin ETFs have also submitted applications to launch spot Ethereum ETFs, with deadlines for resolutions coming later this year.
Is Bitcoin's next short-term target of $50,000?
Crypto analyst ArslanAli noted on Platform X that key technical indicators show that Bitcoin's medium-term support is at $45,900. The immediate resistance level is $48,420, followed by the resistance levels of $50,000 and $51,375, marking a potential obstacle to further price increases.
If it consolidates to the downside, the support level is at $44,520, followed by $42,925 and $41,500, which may provide support in the event of a pullback in price.
In addition, Bitcoin's Relative Strength Index (RSI) is currently at 76, indicating that the asset is overbought. This high RSI level is usually an indication that a price correction may be imminent.
Joel Kruger, market strategist at LMAX Group, released a report saying that the announcement could push up the price of Bitcoin if the SEC does approve the ETF. "Approvals could trigger a 10-15% upside, driven by spectator capital," Kruger said. If it is not approved, the forecast hints at a possible correction, but strong support is expected above $30,000. ”
According to a report released today by Standard Chartered Bank, spot bitcoin ETFs could bring in up to $100 billion in new inflows throughout 2024, resulting in a bitcoin price that could reach $200,000 by the end of the year.
Matrixport believes that bitcoin may fall again to consolidate because there are signs that "smart" funds are once again under selling pressure and the funding rate is weakening. The recent market correction may not have completely eliminated downside risks, and BTC is likely to retest the $36,000 to $38,000 price range.
BitMEX founder Arthur Hayes believes that the spot Bitcoin ETF approval could send Bitcoin soaring to $70,000. However, he made cautious predictions about the subsequent sharp adjustments. Hayes said a "healthy" 20% to 30% retracement is justified from the price in early March, and could fall by as much as 40% if Bitcoin hits a range of $60,000 to $70,000 in the coming weeks. He further predicted that Bitcoin would initially experience a sharp decline as the broader financial markets experienced, but would rebound again ahead of the Fed's interest rate meeting due to its "neutral reserve hard currency" status.
Although forecasts for price action vary, analysts agree that there is high demand for Bitcoin ETFs from both institutional and retail investors, and they are bullish on the prospects for their adoption.
ETF expert Nate Geraci expects spot Bitcoin ETFs to surpass all previous ETF issuance records. Galaxy Digital expects the addressable market size of the U.S. BITCOIN ETF to be around $14 trillion in the first year after launch, expanding to $26 trillion in the second year and $39 trillion in the third year.