This is why analysts say that Bitcoin ETFs may “completely change the structure of the market”


After reaching a new all-time high, Bitcoin (Bitcoin) Prices are cooling in the form of profit-taking, consolidation and uncertainty, and traders are cautious about opening new positions at record highs. This seems to be exactly what happened this week, as the price of Bitcoin is difficult to maintain at the $60,000 level as support.

BTC/USDT 4-hour chart. Source: TradingView

In general, most analysts still maintain an optimistic macro view of Bitcoin’s price movement, so much so that PlanB, Willy Woo, and others claim that the second half of the bull market was evidenced by the price reaching $67,000 last week.

Here are the analysts’ views on what might happen next to the Bitcoin price, as well as some insights into the larger market dynamics that are currently at play.

Bitcoin ETF “completely changed the market structure”

Much of the hype surrounding Bitcoin prices in the past few weeks has revolved around the launch of the BTC ETF. For many years, analysts have believed that the approval of this tool will provide institutional investors with new barriers to entry and formally consolidate Bitcoin’s “mainstream” status.

Now that two futures-based BTC ETFs have been launched, many companies are eager to propose new ETFs, including leveraged ETF documents from Valkyrie and Direxion’s reverse Bitcoin ETF This will allow speculators to short the price of BTC.

Ben Lilly, a market analyst and co-founder of Jarvis Labs, said that the arrival of these ETF options “completely changed the market structure”, “because now through spot access, CME futures, futures-based ProShares Bitcoin Strategy ETF (BITO) ETF And options.”

Lily said,

“This will create a lot of arbitrage opportunities in the market, just like the CME spread already exists. As more and more trading desks allocate funds to the Bitcoin strategy, this spread will shrink over time. Actually On the above, volatility will definitely be compressed, because any volatility will cause more capital to be executed as part of various strategies.”

According to Eli Lilly and Company, the main gain from the launch of the BTC ETF is that “more funds will flow into various forms of Bitcoin exposure.” He also pointed out that “this process will take time” and that “the spread can last until new ones are found.” Up to the balance point.”

Analysts expect a fierce battle between bulls and bears

In the process of launching Bitcoin ETFs, one issue that did not arouse much attention was how these products’ methods of determining BTC prices would affect the actual spot prices and spreads of BTC.

David Lifchitz, managing partner and chief investment officer of ExoAlpha, stated that the “premium and fair value discounts” applicable to these products may result in a larger spread between a particular Bitcoin ETF and the underlying spot price, “because these other contracts are also contractual The further the maturity, the greater the premium/discount.”

Livchitz said,

“Add to the cost of continuously launching futures from one month to another. Over time, this will also affect the value of ETF and spot. In the end, you will get a total junk price that cannot closely track BTC spot, but only related to!”

In terms of BTC price movements, Lifchitz pointed out that the resistance level of $63,000 was resolutely rejected, and pointed out that “the battle between the bull market and the bear market is very fierce.”

Livchitz said,

“However, the previous attempts by the shorts to cancel BTC have been mild, reducing it to $58,000 before the longs charge again… Therefore, we keep our short-term potential downside targets at around $58,000 and $53,000, and look for $63,000 The resistance level becomes the support for the next round of upswing.”

related: Bitcoin price decline matches October 2017, but still predicts that BTC will “explode” before 2022

Some people expect to fall back to a low of $50,000

Independent market analyst Ryan Cantering Clark also expressed a similar view. He posted the following tweet outlining the reasons for his “temporary and complete withdrawal from BTC.”

In a follow-up tweet, Clark emphasized the lower-level support area to pay close attention to and possible good entry points.

Clark said,

“If the $58,000 does not hold, we may re-examine the low level of $50,000. So I will either participate in it or participate higher. If the leverage can be removed from the system without the above conditions, that would be great. Now This is my biggest concern.”

The overall cryptocurrency market value is now $2.452 trillion, and Bitcoin’s dominance rate is 44.9%.

The views and opinions expressed here only represent the views of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading action involves risk, and you should conduct your own research when making a decision.