After hitting all-time highs, Bitcoin (BTC) price usually calms down a bit in the form of profit taking, consolidation and uncertainty among traders cautiously taking new positions at all-time highs. This appears to be exactly what is happening this week as Bitcoin price struggles to hold the $60,000 level of support.
4 hour BTC/USDT chart. Source: TradingView
Overall, most analysts remain positive about the macroeconomic trajectory of Bitcoin’s price trajectory, with PlanB, Willie Wu and others claiming that the second halving of the beef market was confirmed by the price reaching $67,000 last week.
Here’s what the analysts have to say about what could happen to the bitcoin price, as well as some thoughts on the broader market dynamics currently taking place.
Bitcoin ETFs “Change the Entire Market Structure”
There has been a lot of Bitcoin (BTC) price buzz in the past two weeks with the launch of the BTC Exchange Exchange Fund (ETF). For years, analysts have stated that approval of the tool would open up a new level of access to institutional investors and formalize Bitcoin’s main state.
Now that two BTC futures ETFs have launched, several companies are quick to propose new ETFs, including Valkyrie’s leveraged ETFs and Direxion’s inverse ETF that would allow speculators to short the price BTC.
The emergence of these ETF options “totally changed the market structure,” according to Ben Lilly, market analyst and co-founder of Jarvis Labs, “as there are now tier 3 derivatives in cryptocurrencies via spot access, CME futures, futures, etc. …based on ETFs and Options. On the ProShares Bitcoin Strategy ETF (BITO)”.
“This will create many arbitrage opportunities in the market that already exist with the spread of CME. This spread will decrease over time as more branches commit capital to Bitcoin strategies. In fact, volatility will necessarily constrain future movement, as any volatility will lead to It leads to raising capital under various strategies.”
According to Lilly, the main goal of launching the BTC ETF is to “flow more capital into different forms of bitcoin exposure.” He also noted that “this process takes time” and that “the spreads can be maintained until this new equilibrium is found”.
Analysts predict a fierce battle between bulls and bears
One issue that has not received much attention regarding the launch of the Bitcoin ETF is the way these products determine how the price of BTC will affect the actual BTC spot price as well as the spread.
According to David Lifshitz, Managing Partner and Chief Investment Officer at ExoAlpha, the “fair value premiums and discounts” applied to these products are likely to result in significant differences between the set Bitcoin ETF and the underlying spot rate,” as these other contracts also receive a premium/discount. , which is usually greater the longer the contract is valid.
“Add in the cost of a continuous rollover of futures from one month to the next, which will also affect the ETF against the spot value over time, and you have an overall pullback that will not accurately track the BTC spot price, but only correlates with it!”
Regarding the change in the price of BTC, Lifshits pointed to a resolute rejection of the $63,000 resistance level and noted that “there is an intense battle between the bulls and the bears here.”
“However, previous attempts by the bears to lower BTC were moderate, as it fell to $58,000 before the bulls set their course again…so we hold our potential lower targets around $58,000 and $53,000 in the short term and look to resistance at $63,000. Dollars will support the next upward move.”
On the topic: The Bitcoin price drop coincides with October 2017, and a Bitcoin “explosion” is still expected until 2022.
Some are looking for a dip into the low 50,000 category.
Similar sentiments were expressed by independent market analyst Ryan Kantering Clarke, who posted the following tweet explaining why he “is lacking BTC at the moment.”
In a follow-up tweet, Clark highlighted lower-level support areas to keep an eye on where a good slate might emerge.
“If the $58,000 is not held, we may go back to the low of $50,000. So I will either tackle it or deal higher. If the impact can be removed from the system without the above conditions, that is great. That is the biggest concern now.” .
The total cryptocurrency market capitalization now stands at $2.452 trillion, with Bitcoin dominance at 44.9%.