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Bitcoin pulls back from $35,000 but ETF optimism holds – Crypto News
October 27, 2023 12:28 pmVideo
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Bitcoin surges to a fresh 17-month high amid spot ETF frenzy
Faces a minor setback probably due to profit taking
A golden cross seems imminent on the daily chart
Bitcoin jumps above $35,000 on ETF speculation
The king of cryptocurrencies gained more than 11% on Tuesday after BlackRock’s iShares Bitcoin Trust appeared to be listed on the Depository Trust and Clearing Corp DTCC. Although DTCC made clear that being on the list does not indicate that the security has taken regulatory clearance, the listing was enough to trigger speculation that the approval is imminent.
After this initial jump, which pushed Bitcoin to its highest level since May 2022, its price consolidated within the $33,000-$35,000 range, probably awaiting the actual approval for its next bullish spike. Moving forward, it is reasonable for the most famous digital asset to encounter strong resistance as its price has more than doubled since the beginning of the year, allowing short-term speculators to cash out some of their gains.
The optimism surrounding the spot-Bitcoin ETF launch is also reflected in the famous Bitcoin Fear and Greed index, which advanced to 73 this week, its highest level since November 2021 when Bitcoin’s price was above $60,000. In the past, we saw a series of much-anticipated upgrades in the crypto space, such as the Merge for Ethereum, providing only a temporary boost to the prices that quickly faltered. Will the spot ETF theme be any different?
Cryptos decouple from traditional assets
The latest crypto rally has come in a period of elevated uncertainty in global markets. In the past two weeks markets have been flooded with risk-off sentiment, with investors dumping risk-sensitive assets in favour of safe havens. Yet, cryptocurrencies seem unhindered by those risks, deepening their correlation breaks against traditional investments.
At the same time, crypto enthusiasts are bracing for a surge in institutional interest in the case that the ETFs are indeed greenlighted. Hence, this combination could create the perfect setup for cryptos. On the one hand, their low correlation with traditional assets could make them an important tool for portfolio diversification, while the increased regulatory oversight following the ETF approvals would allow more and more institutions to include them in their portfolios.
For that scenario to materialize, investors might want to see a period of relative stabilization in crypto prices, which have exhibited absurd behavior on many occasions in the past.
Consolidation ahead of the next spike?
From a technical standpoint, Bitcoin jumped above $35,000 for the first time since May 2022, attempting to extend its 2023 rally. However, the advance seems to be on pause for now as markets are expecting the peremptory approval of spot ETFs. Meanwhile, the 50-day simple moving average (SMA) is closing the gap with the 200-day SMA, where a potential golden cross could signal the continuation of the year-to-date rally.
To the upside, the bulls could attack the recent 17-month peak of $35,187 before the price challenges the inside swing low of $37,500, registered in May 2022.
On the flipside, bearish actions could encounter support at the previous resistance level of $31,827 ahead of the $30,000 psychological mark.
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