As the United States nears its decision on the first spot Bitcoin ETF, Bitcoin’s price surged to $47,000 but has since retracted, consolidating around $46,500. This movement has sparked discussions of a potential cooldown in the recent rally.
Market expectations of the imminent approval of the U.S.’s first spot Bitcoin ETF have been fueled by a rise in Bitcoin’s price, particularly during U.S. trading hours. However, the option market is giving mixed signals, with short-term implied volatilities (IVs) experiencing a sharp decline, indicating a loss of momentum.
Despite reaching new highs, block trades have decreased, with a noticeable trend of institutional investors taking short positions, suggesting a cautious approach amidst high market momentum.
These significant signals from the option market and strategic moves by institutional investors introduce uncertainty about the future direction of the ETF market, prompting market participants to closely monitor developments and potential shifts in market dynamics.
Analysts speculate that the approval of the U.S.’s first spot Bitcoin ETF might lead to a “buy the rumor, sell the news” scenario, potentially driving Bitcoin’s price below $40,000. Notably, a “smart whale” deposited 1,000 BTC worth $22.47 million to Binance after Bitcoin’s price exceeded $45,000, following a pattern of high-price sell-offs over a two-week period.