The countdown to the SEC announcement
Bitcoin is on the brink of the highly anticipated announcement from the Securities and Exchange Commission (SEC) regarding the approval of one or more Spot Bitcoin ETF filings. The announcement could be made as early as Monday and is expected to be released by Wednesday. Meanwhile, Bitcoin is still battling against the $44,000 resistance level that it has struggled with since December 5th.
An ascending triangle taking shape
Looking at the chart, it can be observed that Bitcoin’s price has formed an ascending triangle pattern. Despite briefly breaking above the resistance level on January 2nd, the price dropped back down the following day. However, the trend line from mid-November is still intact, hinting at a potential breakout.
Given the bullish nature of this chart pattern, a breakout may be imminent, especially if the ETF announcement is positive. While the triangle could continue until the end of January, it is likely that the breakout will occur earlier.
Potential price targets based on fibonacci levels
Taking a broader view, analyzing the weekly timeframe reveals interesting insights if the SEC announcement favors approval. In the 2021 bull market, Bitcoin first rallied to the 0.618 fibonacci level before retracing to test the base. Applying the same fibonacci extension to the current bull market indicates a price target of around $48,500.
Additionally, a trend line drawn from the 0.618 top in 2019 intersects perfectly with the 0.618 resistance level, suggesting a potential rejection from this confluence point. If Bitcoin adheres to these levels and experiences a significant correction, it wouldn’t be surprising for the price to drop back to the crucial $30,000 support level, forming the foundation for the second phase of the bull market.
While market behavior is not always predictable, fibonacci levels tend to hold significance over longer timeframes. This is evident when looking at the 2017 bull market, where these levels were also respected.
Hot Take: A Crucial Week Ahead for Bitcoin
This week will undoubtedly be a crucial one for Bitcoin as the market awaits the SEC’s decision on Spot Bitcoin ETF filings. The price is tightly squeezed against the $44,000 resistance level, poised for a potential breakout. The formation of an ascending triangle pattern suggests a bullish outcome, especially if the ETF news is positive. However, a rejection at the confluence of fibonacci levels could trigger a significant correction, potentially bringing the price down to $30,000. With so much at stake, Bitcoin holders and enthusiasts should brace themselves for a week of high volatility and market-moving announcements.
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