- January 3, 2024
- Posted by: [email protected]
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Bitcoin (BTC/USD) is at a critical juncture in the volatile world of cryptocurrencies, now trading at $45,280, up 6.76% on Tuesday. The impending launch of a Bitcoin ETF looms large, signaling a potentially game-changing development that might attract trillions of dollars in the long term.
This anticipation coincides with Bitcoin grappling with soaring on-chain fees, contributing to a record mining revenue of $1.51 billion in December 2023. The familiar sentiment of ‘buy the rumors, sell the news’ casts a shadow over Bitcoin’s future, suggesting that the outcome of the ETF decision might significantly influence its market trajectory.
The potential introduction of spot Bitcoin exchange-traded funds (ETFs) is expected to initially draw modest inflows, estimated at around $100 million, predominantly from institutional investors, as suggested by VanEck adviser Gabor Gurbacs. However, Gurbacs envisions a substantial long-term impact, drawing parallels with the gold market’s trajectory post-launch of gold ETFs in 2004.
Highlighting Bitcoin’s fixed supply and scarcity, especially due to halving events, Gurbacs suggests a potentially accelerated growth trajectory akin to gold. The key lies in Bitcoin ETFs legitimizing the cryptocurrency for institutional investors and nation-states, echoing sentiments shared by Bloomberg ETF specialists Eric Balchunas and James Seyffart.
As discussions abound regarding the potential ETF approval and its impact on Bitcoin prices, the cryptocurrency’s miners achieved a record revenue of $1.51 billion in December 2023, surpassing previous highs and showcasing resilience despite elevated on-chain transaction fees.
As of December 31, 2023, Bitcoin’s average fee stood at 231 satoshi per virtual byte, equating to $20.86 per transaction, with a median fee of $9.60. The network’s hash price peaked at $133.62 per petahash per second (PH/s), despite facing congestion with a backlog of about 496,000 unconfirmed transactions across 430 blocks.
Entering the New Year at $42,000 with a +1.08% upswing, Bitcoin’s immediate trajectory depends on the critical threshold of $42,965. Resistance levels at $43,857, $44,679, and $45,962 could impede its ascent, while key support lies at $41,683, $40,649, and $39,506.
The Relative Strength Index (RSI) reading of 39 indicates bearish sentiment without reaching the oversold zone, signaling cautious optimism. Trading below its 50-Day Exponential Moving Average (EMA) suggests a short-term bearish trend, further emphasized by a bearish engulfing pattern near the 50 EMA.
Despite the bearish indications, an upward support trendline at $41,750 serves as a crucial defense line against significant price drops. Bitcoin’s market trajectory leans towards bearishness below the $42,985 mark, yet it stands at junctures that could offer resistance against further declines.
Market analysts and investors closely monitor these technical indicators to navigate the ever-changing landscape of the cryptocurrency market, especially in the lead-up to the pivotal ETF decision.
