Bitcoin is expected to face stiff resistance at $45,000, but the possibility of a rally above the key price level remains high.
Bitcoin (BTC) is hovering near the $44,700 overhead resistance, indicating a mild resistance from the bears. However, the downside looks protected as traders expect one or more spot Bitcoin exchange-traded funds (ETFs) to be approved by the regulator in January. The event is expected to provide a massive boost to the crypto space.
The spot Bitcoin ETF approval, if it comes, will cause an initial knee-jerk reaction, but after that, traders are likely to shift their focus to the actual demand for the ETFs. Trading firm QCP Capital said in its market update that the “demand for the BTC Spot ETF at the start will fall short of market expectations.” That could tempt traders to book profits, starting a retretracement.
It is always difficult to predict the short-term market reaction to pivotal events, but there is a tendency for speculators to book profits. Sometimes, the profit booking happens just after the event, and on other occasions, after a spike. But after the initial pullback, the prevailing trend generally resumes.
