Bullish View
- Buy the BTC/USD pair and set a take-profit at 48,000.
- Add a stop-loss at 45,940.
- Timeline: 1-2 days.
Bearish View
- Sell the BTC/USD pair and set a take-profit at 45,940.
- Add a stop-loss at 48,000.
Bitcoin held tight as traders waited for the closely-watched spot ETF decision by the Securities and Exchange Commission (SEC). The BTC/USD pair held steady above $46,500 after it jumped sharply on Monday.
SEC Bitcoin ETF Decision
The SEC is expected to deliver its decision on a spot Bitcoin ETF on Wednesday. In it, the agency will have three key choices. It could reject these applications, accept them, or postpone the decision to a later date.
However, most analysts believe that the agency will vote for all ETFs that have been submitted as it avoids a first-mover advantage. Most of these companies have filed amendments offering cheaper expense ratios to attract more deposits.
There are a few scenarios to expect when the ETFs are approved. The first, and most likely one, is where Bitcoin surges as traders react to the news and then pulls back. This situation is known as buying the rumour and selling the news.
The other scenario is where Bitcoin rises and maintains its uptrend. Besides, some analysts expect big purchases in the coming weeks as institutional investors allocate cash to the coin. In a note, an analyst at Standard Chartered said that he sees inflows of between $50 billion and $100 billion this year. He expects that Bitcoin could rise to $200k by 2025.
The case for a sustained upside is also because Bitcoin has other catalysts. For one, Bitcoin halving is scheduled for late April while the Federal Reserve expects to start cutting rates either in March or May this year.
Options activity is also increasing. The most recent data shows that Bitcoin options rose to $27 billion in December, the highest point since 2021, signaling that there is strong demand.
BTC/USD Technical Analysis
The BTC/USD pair made a strong bullish breakout on Monday as traders waited for the spot ETF news. As it rose, it flipped the important resistance at $45,938, its highest point on June 2nd. It remains above the 50-day and 25-day moving averages. It has also formed a bullish flag pattern, which is usually a positive sign.
Therefore, the pair will likely have a bullish breakout to above 48,000 if the SEC approves the ETF. It could even retest the resistance at 50,000 and then pull back as traders sell the news.
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