Bitcoin experienced a significant sell-off following the launch of the first spot Bitcoin Spot ETFs in the US. Despite erasing all gains from a profitable week, chart analysts predict all-time highs are still within reach.
According to analysts, the newly launched ETFs are seen as positive long-term price catalysts for Bitcoin. As familiar and regulated investment vehicles, they are expected to attract new capital into Bitcoin and increase demand while supply remains constant, as mandated in the BTC code.
Many investors and analysts have expressed their belief that Bitcoin could reach or even exceed its all-time high of $69,000. However, before this happens, Bitcoin may see further pullback, according to analysts. Ari Wald, a senior analyst at Oppenheimer, noted Thursday's rejection of $48,000, which marks the March 2022 top, as significant. He suggested that a “buy the news” scenario may be developing with the launch of Bitcoin ETFs.
Investors and miners are reaping huge unrealized gains as the ETF trend pushes BTC up more than 60% in the past three months. On Friday, Bitcoin fell more than 5% to $43,858.23, according to Coin Metrics. Wald pegged the current support level at $43,000 and suggested $40,000, a level Bitcoin has not seen since early December, would be another potential stopping point. Julius de Kempenaer, a senior technical analyst at StockCharts, is eyeing a slightly higher support level at $45,000.
Wald pointed to the daily Relative Strength Index (RSI), a momentum indicator that measures the speed and change of price movements. According to analysts, RSI recently indicated that there may be a pullback in Bitcoin. An RSI value of 70 or above indicates that an asset is overbought, while an RSI value above 30 indicates that it is oversold.
Despite the potential for a pullback, both Wald and de Kempenaer said Bitcoin's overall uptrend is still intact and could push BTC to a new record this year. “Once the resistance area around $48,000 disappears, this will pave the way for the rally to continue and the all-time high area around $69,000 will definitely become visible,” De Kempenaer said.
Rob Ginsberg of Wolfe Research agrees:
“It's not overbought yet, so I can see it rising towards the $48,000-$50,000 resistance zone in the near term. Once it breaks out, the November 2021 high of $69,000 will be in play.”
*This is not investment advice.