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Bitcoin / Dollar intraday: as long as 46120 is support look for 48310
46120 is our pivot point.
Our preference:
As long as 46120 is support look for 48310.
Alternative scenario:
Below 46120, expect 45330 and 44850.
Comment:
The RSI is above its neutrality area at 50. The MACD is positive and below its signal line. The price could retrace. Moreover, the price is below its 20 period moving average (46871) but above its 50 period moving average (45475).
Earlier this Tuesday, Japan's data showed that household spending fell 2.9% on year in November (vs -2.1% expected). Also, Tokyo's core inflation rate declined to 2.1% on year in December (vs 2.2% expected). JPY remains strong.
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The United States Securities and Exchange Commission (SEC) has recently reissued a warning concerning the risks associated with FOMO (Fear Of Missing Out) crypto investing. This warning comes just days before the anticipated approval of spot Bitcoin (BTC) ETFs.
Bitcoin Price Forecast: Bullish Long-Term Outlook and Potential Short Squeeze After ETF Approval
According to various analysts, the long-term forecast for Bitcoin’s price remains bullish. Grayscale CEO Michael Sonnenshein suggests that the approval of a Bitcoin ETF could attract a significant amount of wealth, potentially expanding the investor base by accessing around $30 trillion of advised wealth. However, CryptoQuant warns of a potential “sell the news” reaction in the immediate aftermath of the ETF approval.
Following the ETF approval, there is an expectation of a short squeeze in Bitcoin’s price, which could break its consolidation phase around $45,000 and challenge the resistance level at $48,100. This resistance is anticipated to be swiftly overcome as long-term holders gain more confidence in their positions.
However, once Bitcoin reaches the range of $50,000 to $52,000, there might be a temporary slowdown in momentum due to short-term holders exiting their positions. Nevertheless, the overall market value of cryptocurrencies could continue to grow, surpassing the $2 trillion mark.
BTCUSD Daily Chart
SEC Warns Retail Investors about Risks of Digital Assets
The SEC’s Office of Investor Education has once again emphasized the risks involved in investing in digital assets such as meme stocks, cryptocurrencies, and non-fungible tokens (NFTs). As retail investors show increasing interest in these asset classes, it is crucial to understand the potential pitfalls and make informed investment decisions.
Spot Bitcoin ETFs Await Approval
Currently, thirteen spot Bitcoin ETFs are awaiting approval from the SEC. Historically, the SEC has denied similar ETF applications. However, an appellate court ruling deemed the previous rejections “arbitrary and capricious.” This has sparked speculation that the SEC may soon approve one or more spot Bitcoin ETFs before the impending January 10 deadline.
The Significance of a Spot Bitcoin ETF Approval
If approved, a spot Bitcoin ETF would have significant implications for various types of investors. Whether you are heavily invested in cryptocurrencies or simply saving for retirement, it is essential to pay attention to the SEC’s decision. The approval of a Bitcoin ETF could pave the way for easier and broader access to the emerging crypto asset class.
Advantages of the New Breed of Bitcoin ETFs
Unlike existing Bitcoin funds that use derivatives, such as futures contracts, to track Bitcoin’s price, spot Bitcoin ETFs will actually hold the cryptocurrency. This key distinction allows ETFs to closely track the value of Bitcoin, eliminating the wide divergence between the fund’s price and the actual value of Bitcoin seen in some existing funds.
Moreover, spot Bitcoin ETFs offer transparency, as each share corresponds to a specific amount of Bitcoin held by the fund. This clarity benefits investors by providing a clearer understanding of what they are investing in.
Understanding the Fees Associated with Bitcoin ETFs
While spot Bitcoin ETFs offer advantages, it is crucial to consider the associated fees. Several fund companies have disclosed the expense ratios for their respective Bitcoin ETFs. For example:
Fidelity Wise Origin: 0.39%
Invesco Galaxy: 0.59% (waived for the first six months for the first $5 billion in invested assets)
Valkyrie: 0.8%
ARK 21Shares: 0.8%
It is worth noting that not all proposed ETFs have specified their fees, and investors should expect relatively low fees from larger fund companies such as Blackrock.
Comparatively, these fees are significantly lower than the expense ratios of existing Bitcoin investment products, such as Grayscale and ProShares, making spot Bitcoin ETFs a cost-effective option.
Benefits of Investing in a Spot Bitcoin ETF
Investing in a spot Bitcoin ETF offers several advantages for investors. These include:
Ease and Safety: Investing in a spot Bitcoin ETF is easier and safer compared to directly buying and securely holding Bitcoin. The managing institution takes care of technical aspects and employs multiple security layers to ensure the safety of the Bitcoin held on behalf of investors.
Portfolio Diversification: A spot Bitcoin ETF allows investors to hold their Bitcoin investment in the same account as their other investments. This convenience provides a comprehensive view of the overall portfolio without the need for multiple accounts.
Accessibility: Opening a retirement account with a crypto exchange can be complex and expensive. Spot Bitcoin ETFs provide a simple and accessible way for investors to gain exposure to Bitcoin, particularly for those looking to diversify their portfolios.
The SEC’s warning about FOMO crypto investing serves as a reminder for retail investors to exercise caution. The potential approval of spot Bitcoin ETFs presents an exciting opportunity for investors, offering advantages such as transparency, closer tracking of Bitcoin’s value, and reasonable fees.
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Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.
