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BlackRock's Bitcoin ETF proposal raises hopes for 2024 market growth

In a recent meeting, U.S. Securities and Exchange Commission officials discussed BlackRock’s proposal for a Bitcoin Exchange Traded Fund. This dialogue indicates a positive outlook for the approval of spot Bitcoin ETFs. BlackRock applied for the iShares Bitcoin Trust ETF in June, sparking.

BlackRock’s application is seen as a pivotal moment for Bitcoin market sentiment this year.

Historically, the SEC has been hesitant to approve spot Bitcoin ETFs, citing market manipulation concerns. However, BlackRock’s application, bolstered by a new trade monitoring mechanism aimed at reducing manipulation risks, stands out. Following BlackRock’s move, numerous other asset managers submitted similar applications.

Expectations are high for the approval of spot Bitcoin ETFs in 2024, including BlackRock’s, potentially attracting substantial institutional investment into Bitcoin. Bitcoin’s price has surged nearly 70 percent since October, currently trading around $42,000.

Recent legal setbacks for the SEC in cases against digital asset manager Grayscale, who also seeks to establish a spot Bitcoin ETF, could expedite the approval process. According to Bloomberg Intelligence, a flurry of spot Bitcoin ETF applications is anticipated between January 5th and 10th, 2024. This period aligns with the final decision deadline for applications from ARK and 21Shares.

BTC technical analysis

Recent technical analysis of Bitcoin indicates imminent volatility. The cryptocurrency has developed a pennant pattern, consolidating from recent highs near $45,000. This structure typically emerges during market consolidations and often precedes a substantial breakout.

BTC technical analysis

Bitcoin’s current pattern suggests two potential outcomes- a drop to $38,000 or a rise towards $48,000, contingent on the direction of the breakout. If Bitcoin breaks below its 21-day moving average (DMA), a swift descent to $40,000 is likely, followed by a possible retest of the $38,000 level, where its 50DMA lies.

Conversely, a breakout above the pennant could propel Bitcoin back to its yearly highs of around $45,000, potentially reigniting bullish momentum towards $48,000.

Long-term bullish outlook remains strong

The future trajectory of Bitcoin appears to be leaning towards a temporary correction, yet the long-term outlook remains notably bullish.

Various market indicators show that the market is relatively balanced. The Relative Strength Index (RSI) is at 51, and the Stochastic Oscillator is at 65, which neither signals an overbought nor oversold market. Although the Commodity Channel Index (CCI) dips to -71, indicating a mild bearish trend, it still resides within neutral bounds.

Crucially, the longer-term perspective offered by moving averages reinforces this bullish sentiment. While short-term Exponential Moving Averages (EMA) and Simple Moving Averages (SMA) for 10 and 20 days suggest a bearish inclination, the longer-term EMAs and SMAs for 30, 50, 100 and 200 days indicate sustained upward trends over a more extended timeframe.

The daily chart analysis further supports a bullish narrative, with a consistent pattern of higher highs and lows. This trend is substantiated by key support and resistance levels at approximately $35,651 and $44,729, respectively, with substantial trading volumes during significant price movements reinforcing these bullish trends.

Although the 4-hour chart shows a more variable scenario with increased lateral movement and potential selling pressure, the overarching sentiment as of Friday, tilts towards a positive long-term trajectory for Bitcoin.