The anticipation of a spot Bitcoin ETF product has triggered a revival in BTC’s price, necessitating preparation for 2 crucial scenarios that may play out ahead of potential approvals.
Despite the latest comment on recently filed S-1 and S-3 amendments, industry experts remain optimistic that the United States Securities and Exchange Commission (SEC) will approve the investment products this week.
In light of this, crypto analytics platform CryptoQuant shared two price scenarios that may play out for Bitcoin while advising the community on how to respond.
Current data insight shows Bitcoin is trading at a price and market capitalization of $46,622.41 and $913,243,758,835, marked by a 6.13% growth in 24 hours. Bitcoin’s trading volume this period has soared by 71.79% to $41,176,365,796.
The CryptoQuant Bull-Bear Scenario
According to CryptoQuant’s bullish scenario, if the price of Bitcoin rises to $48,500, the share of 1-day to 1-week holders is likely to jump above 8%.
The analytics platform noted that this will indicate an overheated market that will reinforce an imminent correction.
The platform highlighted that the $48,500 level is the average unit price of 2 to 3-year holders, some of whom may choose to sell, thus creating a major resistance point.
2 Scenarios Before Bitcoin Spot ETF Approval and How to Respond
Quicktake Post by @MAC_D46035
This post explains how to analyze the Bitcoin price support and resistance using on-chain data of the average unit price of #Bitcoin holders.
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— CryptoQuant.com (@cryptoquant_com) January 9, 2024
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In the bearish scenario projected by the platform, a 2 to 30% drop in the price of Bitcoin may be recorded, dragging the coin down to $34,000 or $30,000. By holding, CryptoQuant noted that the average unit price of 1 week to 2 month and 18 months to 2 year holders are at $34,000.
The average unit price by holding of holders in the 3 months to 12 months category is also at $30,000 and a trend reversal may be recorded if or when these levels are breached.
Risk Management Advocacy
In its guidance to the public, CryptoQuant underscored the imminent approval of spot Bitcoin ETF, a development which, if achieved will usher in a lot of risk amid growing uncertainty. The analytic platforms noted that taking on the upcoming risk is unnecessary.
Despite the current bullish predictions about Bitcoin, there is a slight chance the Spot Bitcoin ETF product may be disapproved. Is this happens, the volatility that will enter the market is bound to be enormous and traders need to properly manage their risks well.
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Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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