Bitcoin Weekly Forecast: Could spot ETF trigger BTC rally to $50,000?

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. 

Also read: Bitcoin spot ETF approval by SEC is a potential game changer for BTC price

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.”

NYDIG BTC

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. 

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