For the second consecutive week, trading in the cryptocurrency market begins with a rapid growth momentum in Bitcoin's price. But if on October 16, the price rose by a relatively moderate for cryptocurrencies 4.4%, yesterday's surge was more than 7.5%. Moreover, during trading on Monday, the increase in prices almost reached 12%, before the bulls began to take profits.
The Bitcoin's price tested the 35,000 level, but it did not manage to consolidate at these highs. The price is stabilizing just below 34,000 today, retaining most of yesterday's gains. Given the strongest overbought condition since early July, it will be difficult to continue the uptrend without a corrective pullback. The fundamental backdrop for the main cryptocurrency is gradually improving, so it is worth considering opening long positions on Bitcoin when it drops to the 32,000–32,500 range.
Cryptocurrency market participants continue to closely monitor the news about the long-awaited approval of a Bitcoin ETF. Yesterday, the U.S. Federal Court of Appeals ruled in favor of the creation of such an ETF by Grayscale Investments, despite the objections of the Securities and Exchange Commission (SEC). The emergence of Bitcoin ETFs will allow a wide range of investors in the U.S. to enter the cryptocurrency market.
A number of major U.S. investment companies, including BlackRock, VanEck, WisdomTree, Fidelity, Bitwise, and Invesco, have already filed applications to create Bitcoin ETFs. Yesterday's court ruling and the flood of applications from U.S. financial market giants reinforce expectations that the SEC will eventually make concessions and allow Bitcoin ETFs to be listed on U.S. exchanges. Matthew Dibb, CEO of Astronaut Capital, estimates the consensus forecast of cryptocurrency market participants as approval of Bitcoin ETFs within the next 3 months.
Buying Bitcoin at current prices is far too risky. To increase the transaction reliability, it is better to wait for a pullback to the range of 32,000–32,500 and open long positions at these levels. The target will again be the 35,000 level, its transition under the buyers' control is important for Bitcoin's continued growth.
The following trading strategy may be offered:
Buy BTCUSD on a pullback to the 32,000–32,500 range. Take profit – 35,000. Stop loss – 31,500.
Traders may also use the Trailing stop instead of the fixed Stop loss at their discretion.