Dear Subscribers,
The day has finally arrived. With the U.S. SEC approving all the Bitcoin Spot ETF files, the trading of Bitcoin ETFs started this Thursday. Further, the improving market conditions and the anticipation around halving and rate cuts will propel Bitcoin upwards.
In this Uncharted:
We analyze how bitcoin, with an almost 180% jump from the low of $16K in January 2023, shows a remarkable recovery.
We expand the implications of the consumer price index increasing 0.3% in December and 3.4% from a year ago, compared with respective estimates of 0.2% and 3.2%
We outline what is next for bitcoin and altcoins after the approval, and how the altcoin season is imminent.
Let’s dive in!
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State of the System
First things first, let’s recap where we were on our wrapped up year special Uncharted:
“Bitcoin commenced 2023 just above $16k, but defied expectations as the year unfolded, surprising investors who had previously dismissed the crypto market. By the beginning of December, bitcoin reached a 12-month high of $45k.
The momentum persisted throughout the year, receiving an additional boost from BlackRock's BTC exchange-traded fund (ETF) application and the subsequent surge in institutional interest in the cryptocurrency market. Bitcoin's ascent from $16,000 to nearly $45k in a single year reflects a remarkable 180% gain, highlighting its potential for resilience even in the face of significant global challenges as we finish the year in the bullish quadrant.”
After a prolonged battle, marked by a significant announcement mishap, the SEC has officially granted approval for 11 Bitcoin spot ETFs targeted at retail investors. This approval carries the potential for widespread normalization and popularization of bitcoin as a lucrative investment opportunity. However, it's essential to note that investors in these ETFs wouldn't possess actual bitcoin, lacking the ability to spend or engage with the applications facilitating its use. They remain detached from the experiences of actual bitcoin holders.
In essence, even in the event of significant success, the impact on bitcoin's adoption as a real currency, and especially its long-term goal of hyperbitcoinization, may be limited. Nevertheless, the pervasive integration of ETFs into the financial mainstream means that individuals may invest in them without a deep understanding. Mutual funds, pensions, and other entities routinely invest in popular ETFs from various sources, giving millions of people indirect exposure to bitcoin. This broad participation could potentially contribute to bitcoin's increasing prominence in both public perception and financial portfolios. Bitcoin is trading around the $45k as we remain in the bullish quadrant for another uncharted.
Bitcoin has entered a significant high timeframe liquidity zone around $48k. A potential upward movement towards approximately $52k is anticipated if the support holds at this level. Conversely, if the support falters, the next target is the CME gap at around $40k. Long liquidations are accumulating, and there's a notable liquidity zone around $42k.
The upcoming price action is expected to be intriguing, especially regarding the possibility of retracement and a test of $42k as a support level before potential continuation.
The recent dynamics in the bitcoin have not lived up to the expectations set by many bitcoin maximalists, with the asset failing to break the $50k mark, and the hype surrounding ETFs showing signs of cooling down. The majority of bitcoin maximalists predicted a "massive pump" that has yet to materialize.
When an asset loses momentum, it often begins to form a rising wedge pattern. It's a crucial reminder to take profits and be prepared for unexpected market shifts, as markets can swiftly change direction. In the recent trading session, bitcoin has been fluctuating without a clear trend, and the $47.5k level has emerged as a significant resistance barrier that has been breached. The critical question now is whether the market can sustain upward momentum.
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