The potential approval of the Bitcoin ETF is undeniably generating a fever of anticipation within the crypto community. As the crucial date approaches, crypto analyzes are well underway.
The crypto market is already anticipating the approval of Bitcoin ETFs
For several months now, members of the crypto community have been waiting to know the SEC’s final decision on Bitcoin ETFs.
On January 2 in particular, the crypto atmosphere seems tense with an increase of more than 5% in the price of Bitcoin in the last 24 hours. The crypto price has surpassed $45,000.
Along the same lines, an analyst from K33 Research (Vetle Lunde) predicts a scenario of post-approval information sales with a probability of 75%. Futures premiums on the Chicago Mercantile Exchange (CME) signal a crowded market, indicating traders are heavily exposed ahead of the verdict.
Recent developments, characterized by three months of upward momentum continues, highlights anticipation of Bitcoin ETF approvals. However, One of warns of signs of froth in the crypto market. This is illustrated in particular by forward premiums reaching annualized levels of 50% on the CME. These indicators suggest a possible upcoming squeeze in the crypto market following the Bitcoin ETF verdict.
More signs of boiling in the crypto market
The increase in open interest of over 50,000 BTC over the past three months clearly demonstrates the anticipation of Bitcoin spot ETF approvals. This also raises the issue of rolling costs, with Lunde pointing out a deferral cost of 1-2% each month on the CME. This is acceptable in the medium term, but potentially unsustainable in the long term.
The retail market is adding to the boil, with funding rates on offshore exchanges hitting annualized highs of 72%. Shorts are hesitant to enter the crypto market ahead of the Bitcoin ETF verdict. Enough to accentuate perp premiums on the spot market and making long ones expensive to maintain.
What are the short and long term forecasts?
Analyst Lunde predicts a rise in the price of Bitcoin ahead of the Bitcoin ETF verdict. It also warns of significant profit-taking by short-term traders. Longer term, Lunde is optimistic. He believes the net inflow of new money via potential spot ETFs, combined with Bitcoin’s April halving, could catalyze further bullish momentum.
The critical issue lies in the net inflow of at least 50,000 BTC ($2.3 billion) in January to ensure market stability. To be continued…
Maximize your Tremplin.io experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.