- Investors exercise caution as Bitcoin ETF approval may cause a sell-the-news event.
- Optimism surrounded Bitcoin mining and rising fees, but the price reflected uncertainty.
The prospect of Bitcoin[BTC] Exchange-Traded Funds (ETFs) gaining approval has generated widespread anticipation, with many eagerly awaiting a decision.
However, recent data suggested that the approval could trigger a sell-the-news event, potentially casting a shadow on the initial excitement.
Speculation on the rise
According to K33 Research, a decision on Bitcoin spot ETFs is expected between the 8th and the 10th of January, with the possibility of market-moving news emerging earlier.
The research emphasized that the prevailing market dynamics point towards a sell-the-news scenario.
It was also noted that traders are heavily exposed ahead of the verdict, with derivatives showing significant premiums after Bitcoin’s recent months of continuous upside momentum.
This exposure makes the event a prime target for profit-taking, potentially leading to a self-fulfilling prophecy of a sell-off.
A 75% probability to the sell-the-news scenario was assigned, contrasting it with a 20% chance of approval, followed by substantial inflows offsetting selling pressure and driving prices higher.
Despite recent meetings and updated S-1 prospectuses suggesting imminent approval, there was a 5% chance of ETF denial according to the data.
Source: K33 Research
Possible impacts
The potential sell-off following the ETF approval could impact Bitcoin’s price dynamics.
Short-term traders eyeing profits may contribute to a temporary downturn, but the long-term implications remain uncertain, hinging on the balance between profit-taking and sustained institutional interest.
Mine on you crazy diamond
Amidst this uncertainty, optimism surrounded Bitcoin mining. Notably, Canadian miner Bitfarms ($BITF) witnessed a doubling of its stock price last month despite unchanged revenue.
This development suggested a positive market sentiment towards Bitcoin-related stocks, emphasizing the broader bullish narrative.
Canadian #Bitcoin miner Bitfarms ( $BITF ) doubled in stock price last month despite its revenue remaining unchanged.
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Another positive indicator for Bitcoin lies in the surge in fees collected by miners. The king coin has claimed the top spot among blockchains by fees over the last 30 days.
Read Bitcoin’s [BTC] Price Prediction 2023-24
With fees annualized at over $4 billion for miners, this uptrend signals robust network activity and reinforces Bitcoin’s attractiveness to miners.
Despite these positive aspects, the immediate market sentiment reflected a decline in Bitcoin’s price. At the time of reporting, Bitcoin was priced at $42,544.09, marking a decline of -1.13% in the last 24 hours.
Source: Santiment
