Cryptocurrency investors are eagerly awaiting the launch of the first spot Bitcoin ETF in the United States, while Bitcoin’s price hovers around $42,500. A recent news report suggested that the U.S. Securities and Exchange Commission (SEC) might approve at least one ETF this week, which has led to increased expectations of a price drop following the ETF approval.
After a strong 160% increase in 2023, analysts have started to suggest that Bitcoin’s price might see a pullback shortly after the ETF approval. They anticipate a consolidation period for Bitcoin leading up to the expected block reward halving around April 2024.
Crypto analyst Rekt Capital shared insights on Bitcoin’s recent monthly close, highlighting key support levels and historical patterns. He noted that Bitcoin has been historically retesting around the support level of $41,000, with downward wicks extending to approximately $37,000, indicating significant price formations.
Rekt Capital suggested that a potential drop to the $37,000 level could be considered a healthy retracement point, emphasizing that similar price actions in the past have contributed to the overall market health of the leading cryptocurrency.
Furthermore, Rekt Capital highlighted that deeper retracements during the period leading up to the block reward halving, which is about 100 days away, could offer ultimate buying opportunities for investors. As the market continues to evolve, traders and investors are closely monitoring these fundamental support levels and historical patterns for potential future price movements.
Recent weakness in options expiring on January 12th suggests a lack of support for the price increase. Analysts also believe that even if the price of BTC rises with the ETF approval, the upward movement could be limited. The current state of the Bitcoin market indicates increased bearish power and control, characterized by lower highs and lower lows, particularly as the previous peak of $44,800 has not been retested, supporting a bearish trend.
Analysis of Bitcoin’s price chart reveals that the largest cryptocurrency has recently fallen below the daily EMA-20, around $42,542, which has not been breached in the past few months after reaching the highest level. The increase in selling volume over the last two days, reaching peak levels not seen since April, suggests the possibility of an impending correction.