Bitcoin (BTC/USD) hourly chart
There is no doubt that there has been plenty of anticipation ahead of the approval of Bitcoin ETFs. That has helped the cryptocurrency skyrocket all the way up from $34,000 at the end of November to a brief high of $49,000 this week.
But looking at the price action above, most of the significant spikes or drops in the chart are accompanied with a key headline. And they are all tied to the ETF approval in some way, including the hype surrounding the first day of trading yesterday.
As we settle down, we are seeing price revert back down to when the official approval was announced by the SEC on late Wednesday. So, what’s next?
It’s too early to say that the hype is over, especially when risk trades are also staring at the possibility of a turnaround in the price action to start the year. In that lieu, the bond market is the one tying everything together for broader markets. As such, that could also lend a helping hand to Bitcoin to keep the hype train going.
As for the cryptocurrency itself, it’s all about identifying the momentum in the flows i.e. the psychological play. For now, traders are still trying to keep riding that ETF momentum. However, there are strong arguments for why the aftermath will end up being a sell the fact trade.