Bitcoin at breakout level pending ETF approval

Bitcoin at breakout level pending ETF approval

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As the market holds its breath, an announcement on the Spot Bitcoin ETF by the SEC could likely be made within the next two or three days. The $BTC price remains tight against the $44,000 resistance.

The last stretch before the announcement

Bitcoin looks to have entered the very last short stretch before the eagerly anticipated announcement by the Securities and Exchange Commission on whether one or more Spot Bitcoin ETF filings will be approved.

The announcement could even come as early as Monday, and is expected by Blackrock to arrive by Wednesday. Amidst this kind of backdrop, bitcoin is currently still pressing against the same $44,000 resistance level it has been fighting with since 5 December.

Ascending triangle still building


Source: Trading View

One candle was able to open above the level on 2 January, but this was short-lived as the price dropped back down the next day. A trend line going back to mid-November is still being respected, and taking this and the resistance together, an ascending triangle has formed.

Given that this is a bullish chart pattern, a breakout might be expected, especially on news of a positive ETF announcement. The triangle has room for the price to run inside it until the end of January, but the breakout would likely happen well before this.

Perfectly respected fibonacci levels

Source: Trading View

Looking at the positive scenario that the SEC announcement will be for approval, it is interesting to see where price might go. Zooming out on the weekly time frame it should be noted that for the 2021 bull market the price first went from the bottom of the bear market up to the 0.618 fibonacci before going back to test the base. 

The same fibonacci extension for this bull market gives a price of roughly $48,500. Furthermore, if a trend line (dashed line) is taken from the 0.618 top in 2019 it touches the 0.618 resistance in a perfect place for price to be rejected from a confluence of both.

Should bitcoin follow and respect these levels, and the price is indeed rejected and begins a decent correction, it would really not be surprising if this took $BTC back to the major $30,000 support which forms the base for phase two of the bull market.

Although it must be borne in mind that markets might not generally follow an expected pattern, if the time frame is high enough, there can certainly be some more confidence in adherence to fibonacci levels, especially if one looks back at the 2017 bull market where it can be seen that these fibonacci levels were also respected perfectly.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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