In the coming days, the trajectory of Bitcoin’s price is poised for a significant shift, driven by the upcoming decision on the spot Bitcoin exchange-traded fund (ETF) in the United States.
Data from TradingView reveals a constriction in the volatility of Bitcoin’s price movements during the weekend.
The market is on edge, anticipating the reaction of BTC/USD to the approval or rejection of the United States’ inaugural spot Bitcoin ETF, with the decision scheduled for Jan. 10.
Market Indicators as Bitcoin ETF Decision Nears
Analysts widely anticipate that this pivotal event will momentarily disadvantage bullish trends, triggering a Bitcoin price retracement in a “sell the news” occurrence.
On the flip side, some foresee the potential for spontaneous upward movement challenging crucial psychological thresholds.
Regardless of the outcome, indicators indicate an imminent breakout from the narrow intraday range. The Bollinger Bands volatility indicator, narrowing on daily timeframes, is a classic precursor to an expansion in the trading range.
As ETF week approached, Matthew Hyland, a trader and commentator, noted the tightening of Bollinger Bands. Meanwhile, trader Daan Crypto Trades highlighted the reactivation of the “spot premium” in Bitcoin markets, signifying caution among derivatives traders after last week’s abrupt liquidations.
#Bitcoin Spot premium has returned since the most recent flush.
It’s trading at a higher premium than prior to the push into $40K.
Feels mostly like people afraid to long and just generally overleveraged longs that got flushed out hard recently. pic.twitter.com/E7iocINH5L
— Daan Crypto Trades (@DaanCrypto) January 7, 2024
While the spotlight remains on the ETF decision, macroeconomic challenges are poised to enter the scene. U.S. inflation data, including the Consumer Price Index and Producer Price Index for December, is set to be released in the coming days.
Historically influential in inducing short-term volatility in both crypto and risk assets, these data releases are expected to reflect a continued decrease in inflation.
The anticipated outcome of these data releases—the Federal Reserve “pivoting” on its interest rate policy is not currently anticipated at its upcoming dedicated meeting at the end of the month.
According to Rlinda, a market analyst on TradingView, the market is actively gearing up for potential growth. The identified trigger zone, spanning from 44350 to 44500, is anticipated to induce a volume surge and a robust market impulse.
