One of the top traders who benefited from the cryptocurrency rally at the beginning of the year has revealed their forecast for Bitcoin, as market participants anxiously await the potential approval of exchange-traded funds (ETFs) in the spot market.
Cryptocurrency analyst Don Alt tells his 55,600 YouTube subscribers that approval of a spot BTC ETF will likely lead to increased volatility in BTC.
According to the cryptocurrency strategist, BTC could rise briefly once the announcement is made only to correct widely in the following days.
“Let's say the halving and ETFs could make this bullish. Even if that's the case, I think the news will be a sell-off event.
It might go to the upside, like an ETF announcement towards $45,000, or $46,000, or $47,000, or maybe $48,000, or something like that. And then I can see a weekly wick of 10%, 20% or 30% on the downside that's basically taken up, and then it goes up.
This is the most bullish thing I can see happening. “I think this is still highly unlikely given the fact that it will take some time for the ETF to actually get up and running.”
While DonAlt expects a deep correction after the US Securities and Exchange Commission (SEC) gave the green light to spot BTC ETF applications, he believes the companies behind the investment vehicle will support Bitcoin's next wave.
“The only counter-argument I can give to that is basically that it looks a bit stupid for all these companies like BlackRock to announce an ETF and then Bitcoin disappears.
So you could make an argument that they would buy a set just to make this thing not look like a complete joke.
In November, Bloomberg analyst James Seyphart said the SEC could pave the way for approval of several bitcoin ETFs in January.
Bitcoin is trading at $43,844 at the time of writing.
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