Bitcoin price and markets appear unstoppable at the moment, with the asset surging to a new yearly high. However, there remains a scenario in which markets could correct after the anticipated approval of spot BTC exchange-traded funds this week.
On January 9, institutional trading analyst MacroScope said, “We know there will be a dip at some point after approval.” It could be a day afterward or a week, “and the extent is hard to predict, but it should surprise no one,” they added.
Bitcoin Price Dip Levels
The saying “markets don’t move in a straight line” could be applicable soon as Bitcoin price has been powering up since late October.
The hype and anticipation surrounding spot-BTC ETFs have driven prices to a 22-month high of just over $47,000 on January 8.
However, once that dip stabilizes, “the next upward move could be a ripper,” added MacroScope.
“Billions in funds will be watching for the turn, looking to time it exactly, and the mentality on desks is that it would be inexcusable to miss it without allocating at least a starter position.”
This correction will not matter in the long term as billions continue to flow into Bitcoin exchange-traded products.
On January 9, on-chain analytics firm CryptoQuant delved into Bitcoin price support and resistance using on-chain data of the average unit price of holders.
Read more: How To Prepare for a Bitcoin ETF: A Step-by-Step Approach
In a bullish scenario, if Bitcoin prices climb to $48,500, the share of daily and weekly holders is likely to rise above 8%. This “indicates an overheated market and reinforces a correction,” it said.
This is the average unit price of two to three-year holders, which provides a heavy resistance area.
In a bearish scenario, markets have previously experienced 20-30% pullbacks when they are trending upwards. If there is a retreat or ETFs are denied, strong support lies at $30,000 to $34,000, it noted.
The average unit price for the one-week to one-month and 18-month to two-year holding periods is $34,000. Moreover, the average unit price for the three to twelve-month holding period is $30,000.
These provide support and resistance zones for Bitcoin’s next move.
Risk Caution Warning
The analytics firm cautioned over unnecessary risks with approval outcomes imminent.
“With the approval outcome just around the corner, risks are increasing as uncertainty grows, so taking on the upcoming risk is unnecessary.”
Bitcoin price is currently trading up 7.3% on the day at $46,706 at the time of press.
A move to $50,000 this week is not out of the question. This is especially true if the SEC green lights the pack of ETF applications.
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