Bitcoin continues to consolidate above 45,000 level

LONDON: Bitcoin is trying to hold the $45,000 level after it failed to close above yesterday. While sideways movements dominate trading on Wednesday morning. Bitcoin’s moves come as investor sentiment continues to be positive, which comes from hope that the SEC will approve the launch of Bitcoin spot ETFs in the coming days.

It seems that these hopes have been strengthened as analysts adhere to their expectations about the possibility of the authority approving many asset managers’ requests at once on Jan 10. Bloomberg analysts maintained a 90 percent probability that the SEC would approve these applications on that date. While they did not raise this probability further, with the possibility remains that the authority may take more time to make its decision, according to what analysts told Cointelegraph.

This sentiment was also reflected in more noticeable liquidations of short positions in the crypto market and Bitcoin in particular. About $90 million were liquidated from short positions for various cryptocurrencies on Tuesday and the same amount for long positions as well, according to data provided by CoinGlass. As for Bitcoin, it received the largest portion of these liquidations, with more than $48 million in short positions. These liquidations are the largest since Dec 5.

At the same time, about 20 million buying positions were liquidated, coinciding with Bitcoin exceeding the level of $45,000. In contrast for this positive sentiment, there is increasing talk about the possibility of “sell the news” if the SEC approves the launch of spot Bitcoin ETFs, especially with the strong gains that cryptocurrencies have witnessed since hope about this increased months ago.

We may actually see the phenomenon of selling the news if approval is confirmed, which may hinder the gains of cryptocurrencies to some extent. However, I believe that this may happen for a limited time and magnitude, before the true market fundamentals are reflected in prices. The most prominent of these fundamentals may include the significantly increased demand for Bitcoin by asset managers, which is estimated at more than $100 billion. On the other hand, the continued uncertainty regarding the regulatory and legislative environment governing the cryptocurrency market in the United States is the most prominent obstacle to these potential gains in terms of market fundamentals.