Bitcoin Weekly Forecast: Analyzing possible short term implication of probable spot ETF approval on BTC price

Bitcoin (BTC) price remains within the weekly supply zone, with a bold attempt to shatter its mean threshold proving premature. It comes amid an overly cautious market spot and perpetual traders both waiting to play their hand after a decision from the US Securities and Exchange Commission (SEC) regarding spot BTC exchange-traded funds (ETFs).

Also Read: Spot Bitcoin ETF updates as window for approval opens

Bitcoin price possible turnout, short term, after SEC’s decision

As the market anticipates a decision from the US SEC soon, now that the January 5 to 10 window has officially opened, trading volume has dwindled as traders wait to play the next narrative. Euphoria about the product launched is already priced in, and now the market waits for an actual decision that will determine what comes next.

According to Adam Cochran, an investor and marketing strategist, most people are overestimating the impact of the ETF short term, while underestimating its long-term impact. Long term, he sees the product improving the health of the system, but short term, Cochran anticipates flows to be minimal, as far as capital inflows into the sector is concerned. His is therefore from a market front

More closely, Crypto Rover gives a short-term outlook, saying that he anticipates a sell-the-news scenario . Specifically, he foresees a surge in Bitcoin's value, possibly ranging from 5% to 10% if an approval comes. For the following days, however, Rover expects a sell-off catalyzed by developing news.

The weekly supply zone continues to hold as resistance for Bitcoin price, for the meantime, amid a cautious market as traders wait for SEC’s decision. The caution continues to abound after longs and shorts were rekt during the January 2 crash. A decision from the SEC could move BTC, with $37,800 and $48,000 levels being critical in determining the next directional bias.  

Speculative capital influx between $25,000 and $44,000 likely to cash in post approval

It is impossible to ignore the fact that spot BTC ETF news has been among the biggest drivers for Bitcoin price in 2023, propelling BTC from the $25,000 range to the $44,000 range it currently resides. This represents almost a 50% climb.

With this, a significant part of this capital will be looking to sell, cashing in the nearly 50% gains. This could happen post approval, not before. In the days after the approval, that is when the real test of selling pressure will be seen, steered by emerging news that will hit the markets then.  Among these news will be the actual demand for the ETF, the speed at which it becomes operational, and whether GBTC holders decide to sell their Bitcoins.

Bitcoin price outlook as spot BTC ETF window opens

As Bitcoin price remains within the weekly supply zone, the Relative Strength Index (RSI) is deviating to the north, suggesting rising momentum. This position is supported by the Average Directional Index (ADX) indicator, which is rising to show a strengthening upside.

Meanwhile, the Awesome Oscillator (AO) remains in the positive territory with green histogram bars, showing the bulls maintain a strong presence in the BTC market.

If approval does come, Bitcoin price could breach the mean threshold of the supply zone at $43,860, potentially extending north to tag the $48,000 psychological level. In a highly bullish case, the gains could see BTC hit $50,000 before the bears set in.

BTC/USDT 1-week chart

Conversely, a rejection or delay could provoke a sell off with longs likely to be liquidated. This could send Bitcoin price below the $40,000 psychological level. A break and close below here could tone BTC for a move to $37,800, or worse, revisit the $30,000 psychological level.