January 10 is the deadline for the U.S. Securities and Exchange Commission (SEC) to make a decision on a Bitcoin ETF. Markets are optimistic about the approval of a Bitcoin ETF, arguing that this key event could have broad implications for the crypto market, including Ethereum, the second-largest cryptocurrency by market capitalization.
If a Bitcoin ETF is approved, the price of Ethereum could rise by as much as 75% in the coming months.
Approval of a Bitcoin ETF may set a regulatory precedent for other cryptocurrency-based ETFs, as it would establish a applicable regulatory framework for ETFs of other cryptocurrencies such as Ethereum. frame.
In December 2023, the SEC announced that it would make a postponement decision on several U.S. Ethereum ETF applications, with a new deadline set for May 2024. These ETFs include the Hashdex Nasdaq Ethereum ETF, Grayscale Ethereum Futures ETF, VanEck Ethereum Spot ETF, and the Ethereum Spot ETF proposed by ARK Invest and 21Shares.
The SEC process includes a delay in approval to allow for public input to decide whether the listing should occur. Additionally, the delay in approval comes as the committee investigates the classification of some PoS cryptocurrencies.
Interestingly, Ethereum was not considered a security in the recent SEC lawsuit against cryptocurrency exchanges. Additionally, the SEC did not challenge Ethereum’s classification, even during the Commodity Futures Trading Commission’s (CFTC) ETF registration process.
This increases the likelihood of a spot Ethereum ETF being approved in the United States in May 2024, which could boost ETH prices.
If the approval of the Bitcoin ETF becomes a "sell-the-news" event (i.e. a positive event), due to the correlation with the price of BTC in recent years Sex, the price of Ethereum may usher in a sharp rise.
Fundamentally speaking, the approval of a Bitcoin ETF could lead to increased investment in cryptocurrencies from traditional financial investors. This, in turn, could cause ETH prices to rise in anticipation of increased demand.
# Conversely, a delay or rejection of a Bitcoin ETF could lead to a short-term pullback. A recent Bitwise survey found that only 39% of U.S. financial advisors believe a Bitcoin ETF will be approved this year.
Judging from K-line technical indicators, recently, the price of ETH is approaching the resistance trend line of its rising wedge shape. Delay or rejection of the Bitcoin ETF could lead to a pullback to the wedge’s lower trendline near $1,865 in February.
The $1865 level coincides with ETH’s 0.236 Fibonacci line and its 50-week exponential moving average (the red wavy line on the chart above).
On the other hand, ETF approval could invalidate Ethereum’s rising wedge entirely in favor of an ascending triangle reversal pattern, as shown below.
If so, by March, Ethereum could rise to the triangle’s upside target near $3,870, a 75% upside from current price levels, and the 0.786 Fib The lines coincide.
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