Bitcoin Couldn’t Break the $36,000 Resistance Level, What’s Next?
Do you remember the days when Bitcoin couldn’t break the $36,000 resistance level? Now the same situation is valid for $38,000. Despite the transaction volumes being over $50 billion, investors who want to reduce their risks during high volatility periods continue to sell at resistance levels. This indicates that those who are running for short-term gains are contributing to the suppression of the price. So what’s next?
If Bitcoin fails to break the resistance, we may see a decline in altcoins, and the total market value may decrease from around $1.4 trillion to about $1.25 trillion. The main motivation for optimists is that we are now one step closer to ETF approval. Also, the updates in ETF applications, as we share several times a week, suggest that there is a strong communication ongoing, which is different from the previous rejection processes.
Some claim that ETF approval will trigger the “buy the rumor, sell the news” effect. Therefore, even if an ETF is approved, they do not expect a parabolic increase in the markets. But there is an important difference here. Bitcoin is not rising due to a partnership announcement with Google; ETF approval means much more than a partnership news. The first target with ETF approval is to pump approximately $50 billion liquidity into the markets. Can the “sell the news” logic really work with $50 billion demand and trillion-dollar asset managers converting BTC to USD using cold wallets (we can also call them Coinbase custody services)?
The motto “buy the rumor, sell the news” is a strategy that works well in the crypto world, but this time the situation is different. The expected ETF approval news is almost certain to come. What is expected here is the liquidity that accompanies institutional demand being pumped into the markets with the approval. Who will sell when institutions buy Bitcoin and exchange supplies decrease due to the spot ETF structure? Those who want to understand how important $50 billion is for crypto should remember that Binance’s total reserves are approximately $65 billion.
An analyst named Bitcoin Jack believes that the developments regarding ETF and Binance have not been successful enough to dominate the market. He may be partially right since we haven’t seen a significant increase in volatility yet. According to the analyst, investors are divided into two groups; one group is expecting $42,000, while the other group is expecting $33,000.