Bearish view
- Sell the BTC/USD pair and set a take-profit at 40,585.
- Add a stop-loss at 43,480.
- Timeline: 1-2 days.
Bullish view
- Set a buy-stop at 43,000 and a take-profit at 44,970.
- Add a stop-loss at 40,585.
The BTC/USD price continued to consolidate as traders waited for the next catalyst and as others started taking profits. Bitcoin retreated to $42,153 on Wednesday morning, a few points below this week’s high of $43,480.
Bitcoin ETF hopes
Bitcoin retreated even as investors embraced a risk-on sentiment during the American session. The US dollar index retreated to $101.77 while the 10-year and 30-year bond yields dropped to 3.92% and 4.03%, respectively. The CBOE VIX index, which is a well-known fear guage in Wall Street dropped by 1.5% to $12.37.
US equities also bounced back, with the Dow Jones rising by over 200. The tech-heavy Nasdaq 100 and S&P 500 indices rose by more than 0.50%. In most cases, Bitcoin tends to move in the same direction as US equities.
The biggest Bitcoin story of this week was that Blackrock filed an amendment to its spot Bitcoin ETF in a bid to appease the Securities and Exchange Commission (SEC). The new amendment will see the company set cash redemption and creation mechanisms in a bid to protect customers.
The SEC has long supported the redemption mechanism. Therefore, there is a likelihood that it will approve the spot ETF in the next few weeks or months. In a recent statement, Gary Gensler noted that the agency was reviewing the recent Grayscale lawsuit to determine whether it will approve the ETFs.
Bitcoin has rallied in the past few months as investors anticipated future rate cuts and ETF approvals. The Fed has already hinted that it will slash rates in 2024. The next catalyst for the coin is the growing market share for Bitcoin Ordinals and next year’s halving.
Bitcoin Ordinals have become so successful that they have overtaken Ethereum NFTs in terms of sales.
BTC/USD technical analysis
Bitcoin price dropped to a low of $40,000 last week and has struggled to bounce back. This attempt found a strong resistance at $43,476, where it struggled to move above since December 13th.
Bitcoin is also consolidating at the 25-period and 50-period moving averages while the Average True Range (ATR) has moved sideways. The ATR is one of the most popular volatility indicators.
Therefore, the BTC/USD pair will likely remain between the support at 40,000 and the resistance at 43,476. A move above the resistance at 43,476 will open the possibility of it jumping to the YTD high of 44,970.
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