Market Analysts Predict Sell-the-News Scenario for Bitcoin ETFs Verdict
As the verdict on spot Bitcoin ETFs approaches between Jan. 8 and Jan. 10, market analysts predict a sell-the-news scenario. According to K33 Senior Analyst Vetle Lunde, there is a 75% likelihood of this outcome, overshadowing the 20% chance of approval. Lunde cites trader exposure and derivatives’ massive premiums as key factors.
Institutional Players Continue to Build Long Exposure
Despite signs of froth in the market, institutional players are building long exposure in anticipation of ETF approval. Open interest has surged by over 50,000 BTC in the last three months. This reflects their expectations of approval and demonstrates confidence in the market.
Impending ETF Verdict May Trigger Long Squeezes
On the retail side, funding rates on offshore exchanges have reached an annualized high of 72%, indicating extreme anticipation for the ETF verdict. However, given the aggressive leverage from long positions, there is a possibility of long squeezes if the verdict does not meet expectations.
Potential Peak in Current Rally on Verdict Date
Bitcoin’s recent gains, surpassing $45,000, are correlated with growing U.S. spot ETF approval anticipation. Analysts suggest that there may be a potential peak in the current rally on the verdict date due to profit-taking and unsustainable premiums.
Net Inflow Expected in January
K33 Senior Analyst Vetle Lunde expects a net inflow of at least 50,000 BTC (equivalent to $2.3 billion) in January, which is crucial for sustained market growth. While a sell-the-news event may lead to short-term fluctuations, the combination of potential spot ETFs and the Bitcoin halving event in April could contribute to a favorable market outlook as the year progresses.
Hot Take: Sell-the-News Scenario Looms Over Bitcoin ETFs Verdict
As the verdict on spot Bitcoin ETFs approaches, market analysts predict a sell-the-news scenario with a higher likelihood than approval. Institutional players continue to build long exposure, reflecting their expectations of approval. However, extreme anticipation for the verdict may trigger long squeezes if it does not meet expectations. Bitcoin’s recent gains are tied to growing anticipation for U.S. spot ETF approval, but there may be a potential peak in the current rally on the verdict date. Despite short-term fluctuations, a net inflow of BTC is expected in January, which could contribute to sustained market growth alongside potential spot ETFs and the Bitcoin halving event in April.
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