23 February, 2024

Bitcoin ETF Approval Disappoints: What’s Next for BTC Price?

1 month ago

16 Jan, 2024

  • Bitcoin ETF approval fell short of expectations, failing to spark a major price rally as many had hoped.
  • SEC’s differing treatment of Bitcoin ETPs raised eyebrows, leading to the approval’s fanfare.
  • The crypto community eyes $46K resistance and a potential support test at $37-40K as BTC remains range-bound.

The recent approval of Bitcoin Exchange Traded Funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) has left many in the cryptocurrency community somewhat underwhelmed. While there was anticipation of a significant rally in the price of Bitcoin (BTC) following the ETF approvals, the reality has been quite different.

Bitcoin, which had been hovering around the $43,000 mark, failed to breach the resistance level at $43,418, leaving it in a range-bound state. Market observers had hoped that the ETF approval would act as a catalyst for a bullish surge in BTC’s price, but that didn’t materialize.

SEC Commissioner Hester Peirce shed some light on the situation, explaining that the regulatory body took years to approve a Bitcoin ETP (Exchange Traded Product) primarily due to the novel nature of the asset. Bitcoin, being relatively new compared to traditional financial instruments, required more scrutiny before bringing it to a wider audience of investors.

One crucial factor that generated fanfare surrounding the ETF approval was the SEC’s differing treatment of Bitcoin ETPs compared to other assets. Commissioner Peirce noted that the SEC had treated Bitcoin ETFs differently, and it was only a court decision that forced the regulator’s hand to question this disparate treatment.

Chairman Gary Gensler played a pivotal role in the approval process of Bitcoin ETFs, being the deciding vote. However, it’s worth mentioning that the SEC’s decision was not accompanied by the expected surge in BTC prices. Instead, it turned out to be a sell the news event, disappointing many market participants.

As highlighted by Michaël van de Poppe, a renowned blockchain figure, the cryptocurrency community is now eyeing $46,000 as a key resistance level while anticipating a potential support test in the range of $37,000 to $40,000. 

Bitcoin’s current price hovers around $43,008.45, with a 24-hour trading volume of $21 billion. The relative strength index (RSI) sits at 47.52, indicating a balanced market sentiment and the possibility of consolidation.

Bitcoin/USD 4-hour price chart, Source: TradingView

While the approval of Bitcoin ETFs was a long-awaited milestone, it did not trigger the expected bull run in BTC prices. The cryptocurrency market remains in a state of flux, with traders closely monitoring key resistance and support levels in the hope of identifying the next major price movement. As the crypto landscape continues to evolve, market participants remain vigilant for potential catalysts that could steer the course of Bitcoin’s journey.