A prominent cryptocurrency analyst, known as DonAlt, has issued a stark warning about the potential impact of a U.S. Securities and Exchange Commission (SEC) decision on a spot Bitcoin exchange-traded fund (ETF). Speaking to the YouTube series TechnicalRoundup’s audience of over 56,000 subscribers, DonAlt analyzed how this decision could precipitate a substantial decline in Bitcoin’s value.
DonAlt suggests that if the SEC rejects the spot Bitcoin ETF, Bitcoin could plummet by approximately 37% from its current level. He believes that such a denial would undermine the market structure established in the $33,000 to $38,000 range. The analyst pinpoints the origin of the recent upward movement to around $24,000, attributing the rise from $27,000-$28,000 almost entirely to the anticipation of the ETF. A denial, according to DonAlt, could send Bitcoin’s price tumbling back to these levels, potentially reaching as low as $27,000 or $28,000.
At the time of writing, Bitcoin is trading at around $43,755, down 0.97% in the past 24-hour period. This price point serves as a critical juncture, according to DonAlt’s analysis, with the impending ETF decision poised to significantly influence Bitcoin’s value trajectory.
Interestingly, DonAlt also speculates that even the approval of a spot Bitcoin ETF in the U.S. might not be entirely bullish for BTC. While conventional wisdom might suggest that approval should drive prices up, the analyst argues that much of the positive sentiment may already be priced in. He anticipates that approval could lead to a short-term spike, potentially followed by a sell-off. This scenario could see Bitcoin’s value dipping slightly, possibly towards the $38,000 range, before crawling back above $40,000.
On 3 January 2024, Brian Kelly, a prominent cryptocurrency and financial investment expert, conveyed a positive outlook for the cryptocurrency market. As the founder of BKCM LLC, a digital asset investment firm, Kelly is recognized for his expertise in cryptocurrencies, blockchain technology, and financial markets, regularly sharing his knowledge on CNBC’s “Fast Money.”
Kelly compared the current trends in the cryptocurrency market to those typically seen in healthy stock markets, where the performance of mid and small-cap stocks is crucial. He noted a growing interest in cryptocurrencies beyond the major players like Bitcoin and Ethereum, pointing to the rising popularity of altcoins such as Polkadot, Cosmos (Atom), and Solana. This trend, according to Kelly, indicates a more expansive and resilient market growth underpinned by real developments and applications being built on these platforms.
He emphasized the significant advancements within the cryptocurrency ecosystem, particularly in decentralized exchanges and the activities in decentralized finance (DeFi) space. The increase in lending activities and the growth of total value locked in DeFi platforms, Kelly argued, are signs of a maturing market with robust technological and financial foundations.
Regarding the potential impact of the U.S. Securities and Exchange Commission (SEC) approving spot Bitcoin ETFs, Kelly suggested that while there might be an initial sell-off, known as a “sell-the-news” event, the long-term outlook for Bitcoin remains positive. He believes that the adoption of Bitcoin in traditional finance sectors, especially through ETFs, will widen its investor base. Kelly anticipates that even modest allocations of 1%-5% in investment portfolios, such as IRAs or by private wealth managers, could significantly increase Bitcoin’s demand over the year.
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