Bitcoin Eyes $44,000 as Traders Brace for ETF Decision and Inflation Data Impact
Summary:
Bitcoin (BTC) is aimed at $44,000 threshold as it approaches its first weekly close of 2024, amidst potential volatility factors, such as the anticipated approval or denial of the US's first spot Bitcoin exchange-traded fund (ETF). Traders expect a breakout from the limited intraday range, illustrated by the narrowing Bollinger Bands volatility indicator. The impending Bitcoin ETF decision overshadows forthcoming macroeconomic data, including the US Consumer Price Index (CPI) and Producer Price Index (PPI). These releases may impact short-term volatility if they show inflation is reducing steadily.
As we approach the first weekly close of 2024, Bitcoin (BTC) is seeming to aim for a $44,000 mark while potential volatility factors are on the horizon. This has been observed through data from Cointelegraph Markets Pro and TradingView, where a constricting volatility in BTC's weekend price performance was evident.
The market is on edge about how Bitcoin's value might respond to the approval or dismissal of the first spot Bitcoin exchange-traded fund (ETF) within the U.S, due on January 10th. The outcome of this pivotal event is expected to have a temporary negative effect on the bullish trend, potentially causing a reduction in Bitcoin's price according to 'sell the news' predictions. Conversely, some anticipate an impulsive surge that may challenge significant psychological thresholds.
In spite of the uncertainty about the direction Bitcoin may take, indications suggest a breakout from the limited intraday range. The Bollinger Bands volatility indicator has been tightening on daily periods, often viewed as a preliminary sign of range expansion.
As Matthew Hyland, a trader and analyst, relayed to X (formerly Twitter) subscribers, the Bollinger Bands are constricting further as we head into ETF week.
Further to this, Daan Crypto Trades, a fellow trader, has highlighted that Bitcoin's "spot premium" on the market, which has resumed following the recent volatile activity, makes traders hesistant to position themselves bullishly or bearishly after the abrupt liquidations last week.
He also added that "the longer [Bitcoin] stays within this price range, the more positions with stop losses/liquidations will amass above and below the price." He illustrated this with a heatmap of leveraged BTC/USDT exchanges on Binance, the world's largest cryptocurrency exchange.
The anticipation surrounding the Bitcoin ETF is casting a shadow over forthcoming macroeconomic events. For instance, the release of the U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) from December is expected soon. While these data releases often influence short-term volatility in cryptocurrency and other high-risk assets, they would need to show that inflation is steadily reducing to make an impact.
As reported before, the likelihood of the Federal Reserve changing its stance on interest rates, which would be a significant result of this, is currently not anticipated for its forthcoming dedicated meeting later this month.
Please bear in mind, this article is not offering investment advice or recommendations. Every investment or trading decision carries inherent risks, and it is advised that readers thoroughly research before making any decisions.
Published At
1/7/2024 2:07:44 PM
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