Last week, bitcoin prices finally interrupted their upward movement and entered a correction. The scale of the price pullback from the local maximum reached 8%, but drawdowns below the level of 41000 were short-lived and were quickly bought back. Cryptocurrency market participants remain optimistic and hasten to build up long positions at more favorable prices. Yesterday's 3.5% drop by the end of the trading session was also successfully neutralized, confirming the high activity of the bulls.
As January approaches, the prices of Bitcoin and other cryptocurrencies are experiencing an increase in volatility. As early as January 10, the U.S. Securities and Exchange Commission (SEC) is expected to make a decision on whether to allow or ban Bitcoin ETFs. Exchange-traded funds listing applications from ARK Investment and 21Shares are first in line for consideration, but the SEC may make a general decision on all similar applications at once.
According to Bloomberg analysts, market participants will primarily watch the fate of Wall Street's main ETF-heavyweights: BlackRock, Invesco and Fidelity. If their Bitcoin exchange-traded funds receive SEC approval, cash inflows into the cryptocurrency industry could reach $100 billion. K33's Vetle Lunde sees this outcome as a turning point for the entire history of the cryptocurrency market.
Mark Newton from Fundstrat states the end of the so-called Crypto winter - a long period characterized by traders' pessimism and low prices. The approval of Bitcoin ETFs will open the doors to the market for both ordinary people and the largest institutional investors. Pantera Capital analysts compare the current events with the appearance of the first global and U.S. gold ETFs in 2003 and 2004, respectively. Thus, the number of those wishing to include bitcoin in their portfolios will multiply.
To start a new wave of growth, Bitcoin prices should first return to the area of 1.5 year highs - 44500. The RSI indicator got rid of overbought and does not prevent the price from rising.
Consider the following trading strategy:
Buy BTCUSD at the current price. Take profit - 44500. Stop loss - 41000.
Traders may also use a Trailing stop instead of a fixed Stop loss at their discretion