- Bitcoin price remains rangebound in the short term, leaving traders guessing its next move.
- From a big-picture outlook, BTC could reach the triple-digit territory if the spot ETF gets approved.
- In the short term, however, there is a chance that the pioneer crypto slides to $25,000.
Bitcoin price has been consolidating for nearly a month and shows no signs of a breakout move. While the short-term noise might be easy to predict, the long-term outlook is interesting considering the opportunities surrounding a potential approval of a Bitcoin spot ETF.
Bitcoin ETF and its impact on BTC price
A recent report from NYDIG explores the impact of a Bitcoin spot ETF on BTC price by drawing analogies with Gold and its ETF approval. To put it simply, the report shows that spot Bitcoin funds like Grayscale’s Bitcoin Trust (GBTC) or spot ETFs outside the United States constitute a total of $28.8 billion. Gold, on the other hand, accounts for $210 billion in assets under management (AUM) worldwide as of June.
NYDIG BTC spot products
The research further adds that the comparison between gold and Bitcoin is “striking.” While Bitcoin is 3.6x more volatile than gold, “investors would require 3.6x less bitcoin than gold on a dollar basis to get as much risk exposure.” Based on this, it would result in nearly $30 billion of incremental demand for Bitcoin ETF.
The report takes it a step further to suggest that “for every $1 of AUM that flows into a [Bitcoin] ETF, it impacts the value (market cap) of Bitcoin by $10.”
While NYDIG’s report takes a more straightforward approach in comparing Bitcoin to gold, Ecoinometrics’s newsletter takes a more cautious stance. They mention in their report that the impressive rise in gold in the 2000s was due to a combination of factors like the weak US Dollar, favorable macroeconomic conditions and the launch of a new Exchange Traded Fund. Hence, they mention that comparing gold with Bitcoin is unfair.
Instead, Ecoinometrics points out that despite having products like Grayscale’s GBTC or using MicroStrategy as a proxy for BTC, the total AUM is around $20 billion. They add that even if BlockRock’s Bitcoin ETF was to launch, it would not attract a lot of capital inflows but only cause the existing capital to move around.
Ecoinometrics’ newsletter states that BlackRock’s ETF would not single-handedly push Bitcoin price to $100,000.
Bitcoin’s big picture remains the same
Bitcoin price has been consolidating around the $30,000 psychological level for nearly a month. This boring price action is inside the weekly Bearish Breaker, extending from $29,247 to $41,273.
More on Bearish Breaker: What is a Bearish Breaker?
Hence, any upside move will be met with selling pressure. But so far, the bulls have been extremely persistent and have not given up.
From a conservative standpoint, investors can expect a short-term pullback to $27,947. But a better buying opportunity would be a correction that retests the $25,000 psychological level. This level is key and needs to be defended by bulls at all costs. A bounce from this foothold would be critical in continuing the 2023 run . The extension of the ongoing rally would push Bitcoin price to retest the Bearish Breaker’s midpoint at $35,260.
Depending on expectations over the Bitcoin spot ETF, Bitcoin price could stop at $35,260 or target the $40,000 hurdle. In a very rare scenario in which the retail hype catches traction, BTC could retest the $50,000 psychological level.
In such a case, BTC would invalidate the Bearish Breaker setup and would signal that the bulls are ready to tackle the all-time high at $69,000 and potentially reach for fresh highs.
BTC/USDT 3-day chart
While the bullish outlook for Bitcoin price is possible, a breakdown of the $25,000 psychological level would indicate a bullish failure as it would create a lower low. In such a case, BTC could slip down to the $21,313 support floor.
In a dire scenario, Bitcoin price could even nosedive to $17,311.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.