PATNA (CoinChapter.com) — The US Security and Exchange Commission’s approval of Bitcoin And Ethereum Exchange-Traded Funds (ETFs) could mark a pivotal moment for the tokens, as well as the broader crypto market, said a Deribit analyst.
In a YouTube video, Deribit’s Pierino Ursone discussed the possible impact and how the markets might react to the SEC’s approval.
Why Bitcoin And Ethereum ETF Approval Hold Significance?
Speculations of a Bitcoin and Ethereum spot ETF approval generated considerable anticipation in the market. The cryptocurrency market had a relatively flat price action throughout 2023 until late August. When rumors of a spot BTC ETF hit the wires, the cryptocurrency showed signs of some volatility.
The rumors attracted market participants because ETFs provide investors with an accessible and regulated option to gain exposure to cryptocurrencies without owning the underlying assets.
Additionally, ETFs might also attract institutional investors who have maintained a cautious distance from the sector due to regulatory and security concerns. Moreover, Bitcoin spot ETF approval might become a symbol of legitimization of the prime cryptocurrency, attracting more investors to the sector.
A positive decision from the SEC could lead to increased liquidity and stability in the crypto markets. However, it is likely that markets would face some short-term volatility following the influx of capital and speculating trading.
Furthermore, the SEC approving a Bitcoin or Ethereum spot ETF could result in market participants launching more diverse crypto-based financial products, which would positively impact crypto adoption.
However, Ursone warned that the ETF approval would require investors to shift their strategies in options trading. Traders would likely need to adapt to market predictions and leverage volatility while managing risk and implementing protective measures like hedging with futures, etc.
BTC Price Consolidating Below $38,000
Bulls failed to push BTC price above $38,000, with the token dropping 1.3% to a daily low near $37,170.
However, Bitcoin and Ethereum ETF approval news could help the bulls break above the resistance near $38,400. A breakout above the immediate resistance might help BTC price target the resistance near $40,850.
Conversely, an increase in selling pressure might see BTC price drop to the support near $35,300. Breaching the immediate support might result in Bitcoin price dropping nearly 12% to test the support near $32,900.