Post-ETF effect: Has Bitcoin Bottomed yet?

[NewRanger]

Rumors about ETFs started in October, when the price was at $27,000, and from there the price continued to rise, reaching $49,000. The price almost doubled due to ETFs, and it is healthy to see a correction in this price. The correction may lead us in the short term to $37,000 to $35,000, but inevitably To be a starting point for a new rise, as it is unlikely that we will see $20,000 again, and after the price rise, it is unlikely that we will see $30,000 again. Start worrying if we drop below $27,000 and not $40,000.

Just Effect ETFs only. Maybe in this moment we need now is to buy additional coins on spot. Be aware of back pressure. However, for spot trading it will be fine, but trading futures is very risky. Currently, my view is that Altseason will be coming soon.

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[dragonvslinux]

More of less agree with your price estimates. For me, $41/42K was very much a "line in the sand" for the bulls, as it's the volume support as well as horizontal support for the past month, so below that I didn't see any support until around $38K (previous consolidation and volume support). Now we are approaching this level, I'd be surprised not to see a bounce back to previous support, in order to test it as new resistance. Price is also approaching oversold levels on Daily chart, so while the flip to bearish is quite clearly bearish, I'd expect a bounce before further downside, especially now a correction has reached -20% with little to no relief rally.

So far, overall, everything since the ETF launch looks like textbook market trading. There was a sell the news event creating the largest bearish wick on Weekly candle since June 2019, followed by an anticipated correction based on that extremely bearish signal. The 50 Day MA failed to act as support, as did the Ichimoku cloud on this time-frame, and now the RSI & CMF have turned bearish, which are very much sink with each other (price strength & buying pressure). This significance being that these were all bullish for the past 3 months, so the 3 month uptrend (since October) is very much over now, that much is clear enough.

Best case scenario will be finding support around 200 Day MA around $35K, but failing that $30K seems very likely, where there is considerable support, in order to retrace back to pre-ETF hype levels. A bounce from around $38K will likely get speculators excited, but I only see selling occuring above $40K as opposed to a continuation of a bull trend to new yearly highs. The damage has very much been done, as it was second week of Jan. Don't even get me started on the Monthly time-frame, there's still around a week to go, but naturally it looks atrocious, only further confirming a price reversal, so far reminds me of Feb 2020 candle.

[justdimin]

Rumors about ETFs started in October, when the price was at $27,000, and from there the price continued to rise, reaching $49,000. The price almost doubled due to ETFs, and it is healthy to see a correction in this price. The correction may lead us in the short term to $37,000 to $35,000, but inevitably To be a starting point for a new rise, as it is unlikely that we will see $20,000 again, and after the price rise, it is unlikely that we will see $30,000 again. Start worrying if we drop below $27,000 and not $40,000.

Just Effect ETFs only. Maybe in this moment we need now is to buy additional coins on spot. Be aware of back pressure. However, for spot trading it will be fine, but trading futures is very risky. Currently, my view is that Altseason will be coming soon.

ETF situation will eventually happen, maybe it is not happening right now but it will eventually happen, and until that moment we will keep seeing those news. It could be today, tomorrow, a week from now, a month from now, a year from now, nobody knows when it will get accepted. This is why we keep seeing news.

Moreover, just recently, they tweeted about it and put up a page on their website, and then said they got hacked, that could be true, that could be some moron who works there, OR it could also be just them trying to meddle with the market and make it go up and down so that they could make more profit. This is why it's quite important to keep up with the markets, we could suddenly start to go up if there are any improvements on the ETF topic as well.

[d5000]

...

I agree quite a bit that the current chart patterns mostly look like 49k was a local top and now a falling wave is to be expected. However, on a fundamental level, there are some elements which might lead faster to a substantial recovery.

First, there is quite much evidence that apart from the "sell the news" effect, it is quite likely that at least part of the price reversal was caused by the sales by Grayscale (and other financial actors), which means that there was an unique event being responsible for some of the downtrend, which is not likely to continue for much more. I think 35k is possible, but not too likely.

Second, on a fundamental level the ETF decision is clearly bullish, even if I don't think it is enough to "save the bull market" on its own, but it means that demand should gradually be picking up once the major investment firms take a decision. Of course, there could be some confusion due to the present dip, but if we see the price again more firmly in the 40s there should be more and more convinced new investors - the same thing could happen if Bitcoin falls fast to 35k or lower where many could smell a good entry point.

Third, the outlook for riskier assets like Bitcoin looks at least much more positive than 2022/23 in terms of decreasing inflation and interest rates. There might be some speculation around the exact date of the interest rate cut in the US, and some observers think this might occur later than expected, but on the whole, I think there are few elements really putting into danger the quite positive picture the markets expect for this year.

And as you mentioned the February 2020 candle, I think it's quite clear that the extreme crash which occurred this year was greatly amplificated by Covid, and without that event, probably the $20k would have fallen much earlier in 2020. Probably earlier than that year's halving.

There's also the 2024 halving, of course - while I think on a fundamental level halvings since 2020 are overrated as miners aren't really important on the BTC market anymore, I'm almost sure it still has psychologic effects.

[dragonvslinux]

...

I agree quite a bit that the current chart patterns mostly look like 49k was a local top and now a falling wave is to be expected. However, on a fundamental level, there are some elements which might lead faster to a substantial recovery.

First, there is quite much evidence that apart from the "sell the news" effect, it is quite likely that at least part of the price reversal was caused by the sales by Grayscale (and other financial actors), which means that there was an unique event being responsible for some of the downtrend, which is not likely to continue for much more. I think 35k is possible, but not too likely.

Indeed I think this is having an impact, but only in the sense of accelerating the inevitable correction from the event. I'd otherwise factor this into the ETF selling event though. Personally, I thought it'd take around a month before reaching $40K, with more re-tests of >$44K prior to a sustained correction, somewhat similar to summer 2019 when it took a few weeks before finally breaking down to lower levels.

Second, on a fundamental level the ETF decision is clearly bullish, even if I don't think it is enough to "save the bull market" on its own, but it means that demand should gradually be picking up once the major investment firms take a decision. Of course, there could be some confusion due to the present dip, but if we see the price again more firmly in the 40s there should be more and more convinced new investors - the same thing could happen if Bitcoin falls fast to 35k or lower where many could smell a good entry point.

Also agree that ETFs are certainly bullish for Bitcoin, just not in the immediate term as we've already seen. It usually takes a few months for these new launches to "settle" in price before there is substantial demand, so this is also what I'm anticipating. I think it generally helps reduce the chance of black swan events into the $20K levels, if there is generally higher liquidity in the markets.

There's also the 2024 halving, of course - while I think on a fundamental level halvings since 2020 are overrated as miners aren't really important on the BTC market anymore, I'm almost sure it still has psychologic effects.

I'm not so sure about that. It seems like miners are still the majority sellers of BTC, and this is likely to continue, until it is no longer the case. So halving their supply to sell is certainly bullish, even if an increasing amount of miners revenue is coming from fees, especially when there is a spike in the mempool. I'm actually as bullish, if not more bullish, for this upcoming halving than the previous one personally.

Overall, I'm only really bearish for about 3 months, but a lot can happen in that time-frame. Either price correcting to $30K support (another -20%), or otherwise more of a black swan event to $20K. Already price has corrected -20% within 2 weeks, so I don't see it as unreasonable that price could correct another -20% within a few months leading into the havling.

[Woodie]

Based on my technical analysis  looking at the price around $40820 where red arrow is drawn, you can see some rejection around this area  from the wicks & by looking at the left which says bearish pressure is losing momentum and sooner or later the bulls should step into the market which should push price up..

But honestly I didn't see price dropping after the ETF approval as I believed that demand will be there as the buying of Bitcoin would start in readiness for the ETF trades but the opposite happened...but once the dust settles we certainly are going p, better believe that!!

[kentrolla]

Those who have been in crypto space for a while knows this was expected and saw it coming already because there has to be correction phase and fluctuations but these are temporary as you mentioned and I don't see any major set back but there would be fear and panic selling if the Bitcoin dips below $30k which I don't think will happen at one go. As I type this Bitcoin is approaching $41k which is a good recovery and those who had sold in last few days will regret. I think it's time we learn and shouldn't repeat mistake of panic selling as we will see such corrections very often until the bull run.

[EarnOnVictor]

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Nonetheless, the selling could continue a bit, but not caused by such events, but by trader psychology. Now that we're already seen dips below 40k, some will wonder if a bearish wave pattern is forming, and may be cautious with new buys. I think also the fact that the ETF top was close to the psychological barrier of 50k may play a role.

That adds truly, and it is normal, who will be selling their coins eventually if there is FOMO in the market, a situation where the market is extremely bullish? It's practical that investors are not willing to commit more money to the market while a sizable amount is also being liquidated gradually, and not only the Grayscale-related liquidation alone which people are always pointing toward. All is due to the market sentiment. People overhyped the ETF of a thing and made Bitcoin rise hugely, the effect in reality often happens in the reverse when the actual expectation (approval in the case of ETF) is achieved. A situation where the market tends to retrace back its steps a little just like what we are seeing now, but coupled with the prevailing bias/sentiment of the market which is negative. I believe the market will continue to be pressured staying below $40,243 until further notice.

Based on my technical analysis  looking at the price around $40820 where red arrow is drawn, you can see some rejection around this area  from the wicks & by looking at the left which says bearish pressure is losing momentum and sooner or later the bulls should step into the market which should push price up..

But honestly I didn't see price dropping after the ETF approval as I believed that demand will be there as the buying of Bitcoin would start in readiness for the ETF trades but the opposite happened...but once the dust settles we certainly are going p, better believe that!!

Well, I saw the ETF backfiring on Bitcoin as we see now, people are only too expectant, but it's not always so when the needed reaction has been priced in already. This is the case of Bitcoin in relation to the ETF saga, ETF is not an automatic means to move Bitcoin higher, there must be cash volume to back it up. In this case, did people move in money? So it can't do that bullish miracle. The gist is that people actually moved in the money they should have moved in after the approval before the approval due to FOMO. When it was eventually approved, people were sceptical and FUD dominated the market which afterwards caused the downsizing which was also aggravated and emboldened by the Grayscales' sales.

As for your reference on the chart, I've given the condition already where $40,243 is the immediate reference point. Anything can happen on support and resistance levels be it fake or real which calls for caution before deciding based on the levels. In this case, the market can however move above or below it regardless of the initial rejection or false-breakout it suffered. What is important in this situation is to continue to monitor the level with price action and other strong strategies that can confirm a final stance of rejection or breakout.

[ShowOff]

The fire show may not be over yet, but the truth is I don't really expect a super big rise after the ETF's approval. So far we already know how the market will react after the ETF is approved, however, the long-term prospects for bitcoin investment can still be expected. Ignoring short-term volatility is a good idea right now, even if the market sometimes looks manipulated and filled with panic selling.

I don't really care how the market performs in the short term especially ahead of the halving which is reportedly going to happen next April, but the long term outlook is something I am looking forward to. Especially in terms of building a portfolio, panic selling and high selling pressure can now be utilized optimally, of course because there are discounts that are a shame to miss.

[BABY SHOES]

The fire show may not be over yet, but the truth is I don't really expect a super big rise after the ETF's approval. So far we already know how the market will react after the ETF is approved, however, the long-term prospects for bitcoin investment can still be expected. Ignoring short-term volatility is a good idea right now, even if the market sometimes looks manipulated and filled with panic selling.

I don't really care how the market performs in the short term especially ahead of the halving which is reportedly going to happen next April, but the long term outlook is something I am looking forward to. Especially in terms of building a portfolio, panic selling and high selling pressure can now be utilized optimally, of course because there are discounts that are a shame to miss.

Let's say that after yesterday's ETF approval with the desire for a big increase it is still too early because it is unlikely to rise significantly in a short time, but it is better now to ignore short-term volatility because it will be overlooked now but in the long run it will still be brighter than looking at it now.

I also although the halving is getting closer but there will be no greater expectations, if it drops after the halving it will not panic because this will become a habit we ignore again and continue to buy bitcoin at low prices.
If we look at the short term we will be disappointed.
If in the long run you have patience you can say we are winners again.

[Franctoshi]

I'm seeing this correction to likely be the last opportunity to get Bitcoin cheaper, recall what happened back during the 2020 last Bitcoin halving, the “Corona virus market dump”, and that was the last lowest level that the market saw and after which Bitcoin skyrocketed in the price and created a new ATH we have today $69k, so I kind of think this is the point where we are in this market cycle, the lowest level to watch is $31k level of support worst case scenario for BTC, I'm not in panic until Bitcoin begins to take out those levels, and should the price dip down to that point. Sometimes market don't go as fast as we expect, it takes time, patient is the key thing right now.

[OgNasty]

I think with so many coins set to hit the market when mtgox finally does its distribution, that will have to mark the bottom. I suspect we’ll see obvious signs of capitulation with a volume spike before the price can go up again in a big way. They just have so many coins to distribute, it’ll have to be a major market event.

[d5000]

I'm not so sure about that. It seems like miners are still the majority sellers of BTC,

Define "majority sellers".

We have a daily Bitcoin trade volume between 10 and 20 billion US dollars (according to Coingecko, today it was 19 billion). Every single trade has obviously a "buyer" and a "seller".
Miners get 144 BTC per day, which are currently (at $40.000) about 36 million USD. This is between 0.1 and 0.3 % of the total selling volume. (I ignore transaction fees, as they aren't relevant if we want to know about the impact of halving).

Of course, what supporters of the "halving scarcity theory" will always say is that a lot of this volume is wash trading or another short-term trading that doesn't really impact in the "scarcity" equation (demand vs supply). But even if 90% was wash trading, altcoin trading and other non-relevant categories, then miners still only account between 1 and 3% of sales. There are many other relevant seller categories, for example payment processors and merchants (which need fiat), hodlers taking profits, mid-term and long-term traders searching for opportunities etc.

I don't say a halving is totally irrelevant. The first halving was very relevant for the price evolution, because it began to drive out "home miners" (above all "laptop/PC miners"), and people had to buy BTC (or invest in expensive mining equipment) if they wanted to get them. The 2016 halving in my eyes also still had a significant impact on scarcity. It drove "supply inflation" down from about 7-8% to 3-4% (per year), which is significant. But since the 2020 halving Bitcoin has less "supply inflation" than major fiat currencies, so any further reduction isn't really that important. In the 2024 halving we'll go down from 1.5-2% to 0.7-1%.

Taking into account these quite low numbers, for me it seems reasonable that other events, such as the ETF approval, technological advancements which boost adoption, or generally "sentiment"-related questions, are much more important than the halving event.

I also don't dispute that on the whole, Bitcoin should become more scarce over time (demand getting up, supply down), due to the rigid emission scheme (if all other parameters on the demand and supply side stay the same*), and that is of course extremely bullish for the long term and explains Bitcoin's steady growth quite well. My problem is the exaggerated importance some people give the halving event itself (above all the "S2F folks").


*In the very long term, when everybody owns Bitcoin, this may change, but the supply reduction due to key losses etc. should be then enough to compensate for it as the block rewards will be totally negligible.

[Manlikefrank1]

The Bitcoin ETF saga of approval/rejection has finally been put to rest as the "approval" finally has it. But the market has never greeted it with much excitement as it sold on that very day of approval but rose sharply to hit a little above $49,000 the next day before plummeting ever since then. This is no doubt a short-term setback for Bitcoin even as we expect the positive effect of halving on the coin. Also, I hope that this short-term bearish trend, (perhaps I should call it a correction of the main bullish trend) will not grow into a more determined bearishness that will put the coin under further pressure.

As it is now, since last week, I knew that Bitcoin would fall but I expected it to be held by the support level of the 1D Fibo level of 38.2% at $40243 as you can see on my chart below. The market hit the level yesterday and sharply rebounded to record a daily high of $42,143. This indicates that it respected the level and buyers pended their position at the level or closer levels. A sustainable bullish price action above the level, in my opinion, might be the end of the recent bearish view and will bring about the resumption of the whole bullish trend to retarget above $49,000.

But first, the resistance level of the 1D Fibo level of 23.6% at $43,606 must be successfully breached higher, while a daily close above the level will ascertain it. However, a successful breach of the 1D Fibo level of 38.2% at $40243 will cause more bearish pressure that will eventually unveil $37,519, which is the 1D's 50% Fibo level before any bullish consideration will ever be possible.

This is my view guys. What are your views about the current Bitcoin status?

They ETF could attract new investors, increase market liquidity, and lend greater legitimacy to Bitcoin as an investment asset in the crypto space or market.

[EarnOnVictor]

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They ETF could attract new investors, increase market liquidity, and lend greater legitimacy to Bitcoin as an investment asset in the crypto space or market.

Yes, you are so correct about this, and it will even help to shift the pricing dominance from exchanged and give it to the market like the traditional way of pricing in the financial market just like we see in FX, Gold and others. But factually, I have my reservations about this ETF of a thing. When it comes to Bitcoin, this is the market like never before, it has been speaking for itself and will continue to speak for itself. Also, Bitcoin is not new to any core investors anymore, it is either they like it or they do not, and these big guys do not hide their feelings in public, it is either they speak for it or speak against it. Again, Bitcoin is no more a child in this business, it was already in the mainstream of the financial market before the ETF, and this is why the so-called whales were not able to manipulate it as before or have that strong influence on it.

Bitcoin is now behaving more manure like many other old assets, thanks to institutional investors. All these happened before ETF, what makes you think that more would happen because of it, even when the big boys and the less privileged already have access to with or without ETF? Not that the ETF will not help, but I was just saying that it is just overrated and the effect can't be felt as people think in my opinion, and neither will the big boys whose ideologies do not align with that of Bitcoin will change their minds because of ETF. So, what is the big deal?

Don't mind me, just needed to elaborate on that!

[el kaka22]

I would say it is doing fine so far, there doesn't seem to be anything that is making it bigger or higher. I get that it is not simple and I get that it will take some time for Bitcoin to peak, but we are doing fine.

The bottom was under 40k and that has already happened, we are already higher right now and I do not expect it to get any worse. It bottomed out and looking like it will do much better soon enough, that has to be one of the most important parts of the situation we have right now, and could very well be the issue that will get it going. I know that it will take a while for it to reach to bigger levels, but at the same time I think it has to be done in a way that would not be all that confusing, so we should keep it going higher.

[Bitstar_coin]

I don't think we can assume bottoms in the near future until Grayscale sells whatever amount of BTC they need to sell. Safe to assume that they've been a good chunk of the sell pressure we had since few days ago; and the selling should continue on Monday.

Now this type of news makes me wonder what these institutions considered as long-term! Why selling now when they had the opportunity to sell at 60k+? And am also wondering are they selling now to buy much lower or they are selling to exit the market, or they are only selling part of what they hold?
Honestly, when i see big companies like this one selling off their btc it's seem like they suddenly lost faith in the tech and looking to move to something more better perhaps.  

[adultcrypto]

The Bitcoin ETF saga of approval/rejection has finally been put to rest as the "approval" finally has it. But the market has never greeted it with much excitement as it sold on that very day of approval but rose sharply to hit a little above $49,000 the next day before plummeting ever since then. This is no doubt a short-term setback for Bitcoin even as we expect the positive effect of halving on the coin. Also, I hope that this short-term bearish trend, (perhaps I should call it a correction of the main bullish trend) will not grow into a more determined bearishness that will put the coin under further pressure.

I also found it strange that the ETF approval did not see so much rise in price inline with what many people were expecting. But I will say what we saw within the period of the ETF is a clear case of market manipulation that characterizes the entry of institutional funds into any asset. The Bitcoin price trajectory is looking like one carefully control by strong hands that want price within a certain level for reasons best known to them. Other things being equal, the ETF approval was enough to lead to a massive surge in price, but instead we say massive dump in price. This is not a mere coincidence as I believe they want to keep the price low prior to the halving that is happening in April this year.

[moneystery]

I would say it is doing fine so far, there doesn't seem to be anything that is making it bigger or higher. I get that it is not simple and I get that it will take some time for Bitcoin to peak, but we are doing fine.

...

so far there has been no news that could move the price of bitcoin and it seems that investors are currently waiting and seeing what the next condition of the bitcoin market will be, whether it is heading to a good point or not. especially since halving day is approaching, it makes many investors just look at and hold their bitcoins, while making small investments to fill their wallets.

[EarnOnVictor]

Helly guys! I can see that Bitcoin is moving as planned judging by my analysis in the OP...Many will be smiling to their banks and wallets now... and I think that the asset has bottomed eventually which was the main context of discussion here. It wasn't easy though and Bitcoin first breached below the first reference price of $40,243 and wanted to move lower with a bearish price action. But since that wasn't the preference of people, especially this time when halving is fast approaching, the coin was able to breach the level upward again and maintain a stay above it for over a week, if not two.

But again, the $43,606 was another issue that it has been trying to breach for about a week now. Thankfully, the level was successfully breached yesterday and with a daily close above the level, and for the fact that the asset still preserved the bullish price action on the weekly chart among others. I can't but believe strongly that we might have bottomed at around $38,500 this year, with the focus fully shifted to the bullish side.