- Investors are cautious as Bitcoin ETF approval could trigger a sell-the-news event.
- Optimism surrounded Bitcoin mining and rising fees, but the price reflected uncertainty.
The prospect of Bitcoin[BTC] Gaining approval for Exchange-Traded Funds (ETFs) has raised widespread expectations, with many eagerly awaiting a decision.
However, recent data suggested the approval could trigger a sell-the-news event, potentially casting a shadow on the initial excitement.
Speculation is increasing
According to K33 Research, a decision on Bitcoin spot ETFs is expected between January 8 and 10, with the possibility of market-moving news emerging sooner.
The study highlighted that prevailing market dynamics point to a sell-the-news scenario.
It was also noted that traders are heavily exposed ahead of the verdict, with derivatives showing significant premiums following Bitcoin’s recent months of continued upward momentum.
This exposure makes the event a prime profit-taking target, potentially leading to a self-fulfilling prophecy of a sell-off.
A 75% probability was assigned to the sell-the-news scenario, contrasted with a 20% chance of approval, followed by a substantial inflow that offset the selling pressure and drove up prices.
Despite recent meetings and updated S-1 prospectuses suggesting impending approval, there was a 5% chance of ETF rejection, according to the data.
Source: K33 Research
Possible consequences
The potential sell-off following the ETF’s approval could impact Bitcoin’s price dynamics.
Short-term profit-seeking traders may contribute to a temporary downturn, but the long-term implications remain uncertain as they depend on the balance between profit-taking and continued institutional interest.
Mine on you crazy diamond
Amid this uncertainty, optimism surrounded Bitcoin mining. Notably, Canadian miner Bitfarms ($BITF) witnessed a doubling of its share price last month, despite unchanged revenues.
This development suggested positive market sentiment towards Bitcoin-related stocks, highlighting the broader bullish narrative.
Canadian #Bitcoin miner Bitfarms ( $BITF ) the share price doubled last month, despite turnover remaining unchanged.
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Another positive indicator for Bitcoin lies in the increase in fees collected by miners. The King Coin has claimed the top spot among blockchains in terms of fees over the past 30 days.
Read Bitcoin’s [BTC] Price forecast 2023-24
With fees exceeding $4 billion annually for miners, this upward trend indicates robust network activity and strengthens Bitcoin’s attractiveness to miners.
Despite these positive aspects, 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 past 24 hours.
Source: Santiment