BTC moving sideways in the daily chart. Source: BTCUSD Tradingview
The general sentiment in the market remains bullish as Bitcoin has been able to shake off the bears over the past days. Traders and savvy investors have called BTC’s recent price action the beginning of the “Bitcoin Season”.
Related Reading | TA: Bitcoin Starts Fresh Rally To $60K, What Could Fuel More Upsides
During this period, BTC takes over the spotlight and rallies absorbing capital from other cryptocurrencies. As a consequence, the Bitcoin Dominance trends to the upside as it has since mid-September standing at a 44.65% of the entire crypto market.
Source: BTC.D Tradingview
This metric stands far from its pre-crash levels but could continue to increase in the coming days suggesting more appreciation for Bitcoin.
In a report QCP Capital emphasized the importance of a potential BTC-based Exchange Traded Fund (ETF) in the United States. This event is most likely driven the current bullish price action impacting the crypto market.
The U.S. Securities and Exchange Commission (SEC) has postponed the decision to approve or reject, their usual decision in the past, a Bitcoin ETF until next week.
The market seems to be positioning towards an approval on the back of certain statements made by the SEC Chair Gary Gensler. The regulator claimed that it’ll be more inclined to approve a Bitcoin ETF based on Chicago Mercantile Exchange (CME) futures.
Related Reading | Why Bitcoin Could Be Far From $100,000, Says Fidelity Analyst
QCP Capital explained the effect of these claims in the market:
Funding and forwards have also been heating up over the last two weeks since SEC chair Gensler made favourable comments about a futures-based BTC ETF. Perpetual swap funding went from slightly negative in the end of September to around 20% now.
Bitcoin At A Crossroads, Fresh Capital Price In ETF Decision
Further data provided by QCP Capital showed that institutional investors have entered the market after pricing in a potential Bitcoin ETF approval. As seen below, the CME futures premium as trend upwards especially after Gensler made its optimist comments.
Source: Skew via QCP Capital
In that sense, the SEC’s decision could trigger two of the following scenarios for Bitcoin. In the bullish scenario, the ETF approval will drive a new wave of institutional demand for BTC, QCP Capital expects.
In a second scenario, Bitcoin will face another “buy the rumor, sells the news” event with potential for more downside and a retest of its support levels.
Related Reading | Bitcoin Price Prepares To Blast Off Back Into RSI “Bull Zone”
As seen below, QCP Capital highlighted the dynamic in the BTC Options markets with the “front-end risk reversals” tending downside. This suggests a lot of uncertainty amongst investors and a “prevailing downside nervousness”. The firm said:
Direction-wise for BTC, we find ourselves with a bullish bias but unable to form a strong bullish conviction in spite of the clear optimism in the market.
Source: QCP Capital
The firm has set its target on Monday, next week. If the event is to favor the bears, it is possible that the weekend price action might reveal what’s to come in the following days. QCP Capital said:
A lot hinges on the Pro-shares ETF decision on Monday, with their application being the first and widely expected to get approval. As the ETF decisions are underway, we expect BTC to remain the focus of the crypto market.