A crypto trader who predicted the 2023 rally of Bitcoin (BTC) is warning that the leading cryptocurrency could face a fake breakout if a spot-based BTC exchange-traded fund (ETF) gets approved by regulators.
Bitcoin ETF: A Bull Trap?
In a recent strategy session, pseudonymous analyst DonAlt tells his 53,000 YouTube subscribers that he is not convinced that a Bitcoin ETF approval would spark a sustained rally for the flagship crypto asset. He says that sellers could use the opportunity to unload their BTC positions and trigger a sharp reversal.
“We didn’t have the ETF denied, but we still went all the way back to where it was announced. So either you’re getting the biggest discount here of all time or we’re going to get shi*t news. I’m 50/50 on it, but I don’t like the weakness. So even if we get an ETF, there’s a chance that we’re just going to go to $32,000 to $35,000 given the recent weakness. This is crypto-specific weakness, and people are very willing to sell it could be that people just start selling at $32,000, $34,000 [or] $35,000 if we get [an] ETF approved. If we get it denied, we’re going to go, I think, to $20,000 – $19,000.”
DonAlt adds that he is not interested in buying Bitcoin at its current price level of around $26,000. He says that he would rather wait for a clear sign of bullish momentum before entering a long position.
“I’ll try to buy lower or I’ll try to buy higher. I’m not interested in buying here. Still watching $30,000 for the first signs that bulls haven’t been neutered but the bulls keep disappointing. $27,000 is support but not good enough for me to blind bid. I’d rather just wait until we get some bull momentum back. As in nothing changed, still bearish.”
Bitcoin ETF: A Game Changer?
On the other hand, some analysts believe that a Bitcoin ETF approval could be a game changer for the crypto industry. They argue that it would open the doors for more institutional and retail investors to access the digital asset class without having to deal with the technical and regulatory hurdles of owning and storing cryptocurrencies.
According to Bloomberg Intelligence senior commodity strategist Mike McGlone, a Bitcoin ETF could boost the demand and adoption of BTC and push its price to new highs.
“A potential difference-maker for Bitcoin in 2023 vs. prior years is an exchange-traded fund in the U.S., which may be on track for approval this year. We see an ETF attracting more investment inflows and enhancing price discovery and transparency.”
McGlone also notes that Bitcoin has been outperforming gold in terms of returns and adoption, suggesting that the digital gold narrative is gaining traction.
“Bitcoin appears as an advancing digital version of gold in an accelerating digital world. The crypto has increased about 260% vs. gold’s 7% decline since October 2020.”
At the time of writing, Bitcoin is trading at $26,062, down 2.4% in the last 24 hours.
