- Bitcoin’s impressive start to 2024 has seen it surge to $45,500, driven by the anticipation of an ETF approval, possibly imminent
- The promise of a Bitcoin ETF has been a key driver, infusing sustained momentum into Bitcoin’s rally
- The current challenge lies in overcoming the $48,000 resistance, with expectations that this marks the rally’s peak before a potential price correction
Bitcoin has started 2024 in fine form, clearing a month’s worth of resistance and jumping to $45,500, with an ETF approval potentially just days away. Bitcoin’s price has been fueled by the promise of an ETF ever since Blackrock filed its application in June, and there is still apparently plenty of juice left in the tank. Bitcoin is now left tackling the end-of-level boss in the $48,000 area of resistance, and the general consensus is that this will be where the rally ends and the price begins to reset.
$3,000 Jump Excites Bulls
Bitcoin spent December ranging between $44750 and $40,250, testing the trading chops of those willing to dice with it during this period. This left a very clear level of resistance that needed to be overcome, and overnight it did just that:
The ETF approval window opens on January 5, although it has been suggested that successful applicants will get confirmation today. With major filers having been in discussions with the Securities and Exchange Commission (SEC) in recent weeks and SEC chair Gary Gensler admitting last month that the court’s decision to vacate its rejection of Grayscale’s ETF application had led to his team taking “a new look” at the applications, a Bitcoin ETF now seems almost a fait accompli.
Where Now?
The next question, of course, is: Where does Bitcoin’s price go from here? Bitcoin faces two problems with regard to its price continuing to go up. The first is that it is right on the cusp of the line that separates a pre-bull market from an actual bull market:
Given the difficulty Bitcoin experienced with similarly important resistance levels at $30,000 and $44,000, getting through $48,000 will not be the work of a single candle. We stated at the very start of this bear market rally that $48,000 was possible and so it may well prove, but this would be the time when we would anticipate the pullback to begin.
Secondly, the year-long run has, as we said, been dominated by the potential of a Bitcoin ETF. This potential is what drives a market, but the potential runs out when the thing itself is achieved. With Bitcoin, this may well have the impact of popping a balloon; while there may be a final spike up to the $50,000 level, we would not believe that this would be maintained, turning the awarding of the ETF into a sell-the-news event.
Of course, any dip into the $30,000s would be a great buying opportunity for the long term, but, aside from holding above $48,000 on a weekly level post-approval, we have to treat this at the end of the first post-bear market rally and treat it as such.
