On the morning of November 9, 2023, the price of Bitcoin surpassed $36,000 – its highest level since May 2022.
Many hope that Bitcoin ETF applications from major players such as BlackRock, Fidelity, VanEck, and ARK21Shares will be approved in the near future.
The latest data from Bloomberg analysts shows that there is a 90% chance that a spot Bitcoin ETF will be approved before January 10, 2024.
A recent study by CryptoQuant suggests that approximately $155 billion could flow into the cryptocurrency market if these Bitcoin ETFs are approved. CryptoQuant gives the rationale for this estimate:
“These firms have about $15.6 trillion in AUM under management. If they put 1% of their AUM into these Bitcoin ETFs, the total participation in the Bitcoin market would be about $155 billion.”
So far, the BTC price has reached a high of $36,863 and has barely experienced any pullbacks.
Bitcoin (BTC) continues to break through long-standing resistance levels
A look at the weekly timeframe chart shows the importance of the $31,000 level area. Since December 2020, this area has acted as both support and resistance.
The most recent rejection occurred in July 2023 (red icon). After regaining its footing, BTC accelerated upwards and broke out in October. Since the acceleration (green symbol), BTC has produced four consecutive bullish weekly candles, although the current candle has not yet closed bullishly.
Traders use the relative strength index (RSI) as a momentum indicator to identify overbought or oversold conditions to decide whether to accumulate or sell an asset.
A reading above 50 and trending up suggests that bulls still have the upper hand, while a reading below 50 would suggest the opposite.
The RSI is rising and above 50, both of which are considered signs of an uptrend.
Is $40,000 the next stop for BTC?
Technical analysts use the Elliott Wave Principle as a means of identifying long-term price patterns and investor psychology, helping them determine the direction of a trend.
The most likely wave count shows that BTC bottomed out in June 2022 and started a 5-wave rise (white).
If the wave count is correct, BTC is currently in the third wave of a five-wave rally. Calculating the first and third waves at a 1:1 ratio would give a high of $50,300. This level also coincides with the horizontal resistance area. The target is 40% above the current price.
Despite this bullish prediction, a break below the first wave high (red line) at $31,800 would invalidate the bullish wave count. In this case, BTC could drop by 30% and hit the nearest support at $24,500.