BITCOIN, ETHEREUM FORECAST:
- According to Reports the Spot Bitcoin ETF Decisions will be Received by November 17.
- ETH Spot ETF Filing Sparks a Rally as ETH Meets Key Resistance Level.
- BTC/USD is in Overbought Territory and there is a Chance of a Pullback if the Spot Bitcoin ETF News Does Not Come Through.
- To Learn More About Price Action,Chart PatternsandMoving Averages, Check out theDailyFX Education Series.
READ MORE: Short USD/JPY: A Reprieve in the DXY Rally and FX Intervention by the BoJ
WEEK IN REVIEW
The Cryptocurrency market surged this week as news filtered through about the listing of the Ethereum Spot ETF by BlackRock, the world’s largest asset manager. This comes after a similar move by BlackRock in regard to their iShares Spot Bitcoin ETF which was registered in Delaware 7 days before they filed an ETF application. Towards the back end of October news filtered through that the Spot Bitcoin ETF application had been an approved which sent crypto markets in a frenzy and allowing Bitcoin to convincingly break above the key $30k mark This turned out to be a hoax, but the optimism doesn’t seem to have subsided.
Following the Delaware listing yesterday Ethereum and crypto markets in general rallied in what could be described as a potential case of “buy the rumor, sell the news”. Personally, I think this could prove to be different given the potential influx of demand should the Bitcoin and Ethereum Spot ETFs be approved. The client base who are eyeing an addition of crypto to their portfolios are likely to be long-term holders which could mean that should an approval occur the reaction in the first few days could be massive before we see a significant tail off in both volatility and demand. Of course, BlackRock are not the only asset manager waiting on approval with 12 other applications being submitted to the SEC for approval. One can see the excitement at the possibility of both ETFs being approved in the Fear and Greed Index which has hit the 70 mark up from 47 a month ago and 65 last week.
Source: FinancialJuice
LOOKING AHEAD AT CRYPTO MARKETS, BITCOIN AND ETEHEREUM
Looking at the week ahead and one thing which has become more apparent of late is that Bitcoin and Crypto seem to be at odds with market conditions. Just looking at developments since tension broke out in the Middle East and despite risk off sentiment for quite while Bitcoin and Crypto remained largely unaffected.
The recent fluctuations in the Dollar as well have largely left Crypto unaffected as markets grapple with whether Central Banks are done on the rate hike cycle. Looking at the week ahead and one of the major events that could come to fruition is a potential 8-day window between November 9-November 17 in which all 12 US Bitcoin spot ETF filings could be approved by the SEC. This came courtesy of Bloomberg Intelligence Analysts James Seyffart and Eric Balchunas.
If this is true, this could turn out to be a big week for Crypto as I expect a lot of volatility and a potential surge in price in the days that follow. Demand for Bitcoin will likely skyrocket with another beneficiary likely to be Coinbase as well. This could be a game changer for the industry as a whole and put a mainstream stamp of approval at a time when the US Congress looks to crack down further on the Crypto Industry. Just this week we heard from SEC Chair Gensler who stated that Crypto is used for illicit activities. This was ramped up in the US Congress as well, which is why the approval of the Bitcoin ETF is even more important now.
On a data front we do have US CPI and PPI data releases which could have a huge impact on the US Dollar. The question that will remain though given the recent lack of US Dollar effect on BTCUSD, is whether any significant change in the US Dollar outlook will outweigh the current optimism around the crypto industry.
For all market-moving economic releases and events, see the DailyFX Calendar
TECHNICAL OUTLOOK AND FINAL THOUGHTS
Looking at the technical perspective and BTCUSD has had quite a sizeable run to the upside with very little retracement over the past month. This has seen the RSI (14) into overbought territory which could mean we are in for some form of retracement.
However, the RSI is not always accurate and there is a chance we may see another rally toward the $40k mark before we do see a pullback. Now this will all depend on the Spot Bitcoin ETF application and if any news of approval or not develops in the week ahead.
Key Levels to Keep an Eye On:
Support Levels
- 36000
- 34639
- 34177
Resistance Levels
- 37609
- 40000
- 42500
BTC/USD Weekly Chart – November 10, 2023
Source: TradingView
ETHEREUM
Looking at the developments in ETHUSD on a weekly timeframe and this week puts ETH on course for its best week of gains since the week starting 10 April 2023. We have however run into a key level of resistance around the 2125 handle which was the YTD high, also printed in April 2023.
ETHUSD remains within a wedge pattern that has been in play since June-July of 2022. What is of more interest to me, however, is the MAs which are about to cross over with the 50-day MA eyeing a cross above the 200-day MA. We saw this on Bitcoin before the explosion toward the $38k high this week. SO, is history going to repeat itself?
The only apprehension here is that ETHUSD is currently on its 4th successive week of gains for the first time since January 2023. Then it was followed by some consolidation over the next 4 weeks. This may be the case as well given that Spot ETF Bitcoin approval could see some market participants opt to sell ETH and pile more into Bitcoin, the Good old FOMO.
BTC/USD Daily Chart – November 10, 2023
Source: TradingView
Key Levels to Keep an Eye On:
Support Levels
- 106.09
- 105.63
- 104.28
Resistance Levels
- 107.20
- 108.00
- 109.50
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Written by: Zain Vawda, Market Writer for DailyFX.com
Contact and follow Zain on Twitter: @zvawda
