A recent market update by trading firm QCP Capital has provided insight into how Bitcoin’s price would react if a Spot Bitcoin ETF is approved in January. The firm predicts that a major retracement could occur before a move to the upside occurs.
Bitcoin could return to $36,000
QCP Capital predicts that Bitcoin could return to around $36,000 before resuming an uptrend. At the same time, they expect Bitcoin to face top-down resistance between $45,000 and $48,500. These projections are based on what they expect will happen if the Securities and Exchange Commission (SEC) approves the Spot Bitcoin ETFs in January.
QCP Capital believes that actual demand for these investment funds may initially lag behind market expectations. If so, it has set the stage for the classic “sell the news” scenario, which would see Bitcoin’s price plummet.
The trading firm previously believed that Bitcoin could reach its all-time high of $69,000 if these Spot Bitcoin ETFs see enough capital at launch. They then also warned that approval could become a sell-out event if inflows into these funds were sub-par. Now they seem to suggest that the latter is likely to happen.
However, they don’t expect Bitcoin to take a back seat for too long as they are confident that Bitcoin’s recent resurgence will continue at some point. They estimate that this will likely happen after a few weeks, especially as traders position themselves for a strong rally ahead of the next big thing: the Bitcoin Halving. This event is expected to trigger the next bull run.
BTC price at $43,278 | Source: BTCUSD on Tradingview.com
All attention will be on Ethereum
Ethereum could be the next big play once the pending Spot Bitcoin ETFs are approved. QCP Capital anticipates market expectations and quickly turns to the Ethereum Spot ETFs. Similar to the Spot Bitcoin ETFs, a number of asset managers have also applied to launch a fund that provides direct exposure to Ethereum.
Pending a possible approval of the Ethereum Spot ETFs, some crypto investors may move their capital from BTC to ETH in anticipation of an expected rally in Ethereum’s price. The trading firm stated that they are “leaning against very strong support in the ETHBTC cross at the 0.051 level.”
However, QCP Capital believes that any approval of an Ethereum Spot ETF is still “many months away.” In the meantime, they expect the price of Ethereum to rise remarkably based on such speculations. This could be something similar to what happened with Bitcoin, as the flagship cryptocurrency saw a significant surge following the rumored adoption of Spot BTC.
Featured image from Freepik, chart from Tradingview.com
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