- Bitcoin faces two critical on-chain levels that could dictate its short-term price movement.
- Crypto analyst Ali has pointed out two major “supply walls” that set up the digital asset for a major breakout.
Bitcoin (BTC) has begun the year on a bullish note. Despite investor fears of a retracement after a bullish December, Bitcoin continues to rally ahead. As CNF reported, this is hugely in anticipation of a possible Bitcoin spot ETF approval by the U.S. Securities and Exchange Commission (SEC) next week.
As noted by Michael Saylor, the approval of a Bitcoin ETF could be Wall Street’s biggest game-changer in 30 years. The Bitcoin proponent was drawing parallels from transformative financial products like the S&P 500 ETF. Saylor anticipates a “demand shock” for Bitcoin, followed by a “supply shock” after the April halving event.
Sharing his views on the X platform, crypto analyst Ali has pointed out that Bitcoin is positioned between two critical supply walls. On the support zone, the digital asset at $41,200 – $42,400 is backed by 1.92 million addresses holding 723,500 BTCs. On the resistance zone, between $42,500 – $43,750 1.67 million addresses are holding 706,400 BTCs. These positions hold key significance in that investors could be swayed toward reaccumulating, cutting their losses, or taking profit depending on the short-term movement. The analyst notes;
A sustained close beyond these bounds will help gauge $BTC’s trend. A breakout above resistance may propel #BTC towards $47,600, while a dip below support might lead to a correction down to $38,600.
At the time of press, BTC is trading at $45,600 after a 7% surge in the last 24 hours. This follows a short period of calm when the world celebrated the holidays. As the year gets underway, investors are bullish that the asset will once again post record gains. The Crypto Fear & Greed Index shows greed with more investors buying than selling. Two primary catalysts for the optimism are the likely approval of a Bitcoin spot ETF and the upcoming April halving. But there is reason for investors to be cautious.
Why a Bitcoin ETF May be a Let Down
VanEck adviser Gabor Gurbacs notes that it will initially attract just a few hundred million dollars. “In my view, people tend to overestimate the initial impact of U.S. Bitcoin ETFs. I think maybe a few $100mm flows (mostly recycled) money,” posted Gabor.
Gabor added that most investors get too excited about current events and forget to consider how they play out long-term. For him, BlackRock issuing a BTC spot ETF shouldn’t be the focus. Rather, the conversation should center around what native crypto companies can use products like the ETF to become the next trillion-dollar investment vehicles.
Since the launch of the first gold ETF, the price of gold has shot up from $400 to $1800, with the asset’s market cap shooting from $2 trillion to $10 trillion. The same, if not more, can be expected of BTC.
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