Bitcoin Price Retreating as Market Rally Fizzles Out
The recent rally in the cryptocurrency market, fueled by Bitcoin’s rise above $45,000, has come to an end, with prices now falling. Bitcoin’s price is currently trading at $42,289, experiencing a 6.5% dip in the last 24 hours.
This dip is accompanied by a 16% decrease in trading volume and a 9% drop in the total market cap to $1.6 trillion. Despite these declines, Bitcoin dominance remains at 51.6%, with its market value sliding by 7% to $830 billion.
Bitcoin Price Prediction: Doubts Arise Over ETF Approval
Bitcoin’s price has been on an upward trend since mid-October, reaching above $45,000 earlier this week due to optimism surrounding the approval of spot BTC exchange-traded funds (ETFs).
However, a report by Matrixport predicts that the Securities and Exchange Commission (SEC) will reject all Bitcoin spot ETFs, leading to fear in the market and causing the ongoing correction. The report suggests that Bitcoin could drop by an additional 20% following the ETF denial.
Unpopular Prediction: SEC Expected to Reject All ETF Proposals
The researchers behind the Matrixport report believe that all ETF applications fall short of a critical requirement needed for SEC approval. They expect this requirement to be fulfilled by Q2 2024 and anticipate that all proposals will be rejected in January.
If the SEC does reject the ETF proposals, it could result in cascading liquidations and a rapid decline of Bitcoin prices by -20%, falling back to the $36,000/$38,000 range.
What’s Next for Bitcoin After Plunging to $40,000?
Bitcoin’s price has re-entered the ascending triangle pattern. Before the recent correction, BTC broke out of the pattern and rallied above $45,000 but retraced before reaching resistance at $46,000.
If investors panic sell to protect their capital and profits, Bitcoin could continue to lose ground. A sell signal from the Moving Average Convergence Divergence (MACD) indicator could further support the bearish theory.
The 50 Exponential Moving Average (EMA) at $43,408 and the 20 EMA at $41,977 now act as resistance levels, while the 200 EMA serves as tentative support at $41,977. Losing support at the rising trendline could lead to further losses and a retest of $38,000 and $36,000 levels.
Hot Take: Bitcoin Faces Uncertainty as ETF Approval Hangs in Balance
The recent retreat in Bitcoin’s price indicates that the early-year rally in the cryptocurrency market has come to a halt. Doubts are mounting over the approval of spot BTC exchange-traded funds (ETFs), with predictions that all proposals will be rejected by the SEC. This uncertainty has led to increased selling pressure and a decline in trading volume. As Bitcoin continues to face headwinds and potential liquidations, its price could decline further by -20%. However, if the ETF proposals are approved, there is a chance for a significant rally towards $50,000 by the end of January.
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