27 December 2023
A recent market update by the trading firm QCP Capital has provided insights into how Bitcoin’s price would react if a Spot Bitcoin ETF gets approved in January. The firm predicts that there could be a major retracement before any move to the upside.
Bitcoin Could Retrace To $36,000
QCP Capital predicts that Bitcoin could retrace to around $36,000 before an uptrend resumes. At the same time, they expect Bitcoin to face a topside resistance between the $45,000 and $48,500 region. These projections are based on what they expect to happen if the Securities and Exchange Commission (SEC) approves Spot Bitcoin ETFs in January.
QCP Capital is of the opinion that the actual demand for these investment funds might fall short of market expectations at the beginning. If so, it set things up for the classic ‘sell the news’ scenario, which would cause Bitcoin’s price to dump.
The trading firm had previously opined that Bitcoin could hit its all-time high of $69,000 if these Spot Bitcoin ETFs saw enough capital upon launching. Then, they also warned that approval could end up being a sell-the-news event if inflows into these funds were below par. Now, they seem to be suggesting that the latter is likely to happen.
However, they don’t expect that Bitcoin will stay down for too long as they are confident that Bitcoin’s recent resurgence will continue at some point. They estimate that this will likely happen after a few weeks, especially as traders position for a strong rally ahead of the next big thing – the Bitcoin Halving. This event is projected as what will spark the next bull run.
All Attention Will Turn To Ethereum
Ethereum might be the next big play once the pending Spot Bitcoin ETFs are approved. QCP Capital foresees the market’s anticipation, quickly turning to the Ethereum Spot ETFs. Just like with the Spot Bitcoin ETFs, a number of asset managers have also filed to launch a fund that offers direct exposure to Ethereum.
In anticipation of a potential approval of the Ethereum Spot ETFs, some crypto investors could move their capital from BTC to ETH ahead of an expected rally in Ethereum’s price. The trading firm stated that they are “leaning against very strong support in the ETHBTC cross at the 0.051 level.”
QCP Capital, however, believes that any approval of an Ethereum Spot ETF is still “many months away.” In the meantime, they expect that Ethereum’s price will notable rallies based on such speculations. This could be something similar to what happened with Bitcoin, as the flagship cryptocurrency enjoyed significant rallies on the back of the Spot BTC approval rumors.