After Bitcoin's 17% Surge in 48 Hours, Where Is the Next Resistance Level?
On October 23rd, information regarding BlackRock's Bitcoin spot ETF product, iShares Bitcoin Trust (ticker symbol: IBTC), was listed on the official website of the Depository Trust & Clearing Corporation (DTCC), responsible for handling Nasdaq trades.
BlackRock's Bitcoin Spot ETF, Source: X.
Additionally, the U.S. District Court of Appeals for the District of Columbia officially made public the decision between Grayscale and the U.S. Securities and Exchange Commission (SEC), maintaining the August ruling, which means the SEC will need to review Grayscale's application to convert GBTC into a Bitcoin spot ETF.
Court ruling on Grayscale and SEC case, Source: X.
These two pieces of news have heightened expectations for the approval of a Bitcoin spot ETF. Under this optimistic stimulus, investors began buying BTC frantically, breaking through the $30,000 resistance level and propelling the BTC price to $35,000, representing a 17% surge.
During the upward movement, although it attracted significant selling pressure, it was ultimately absorbed, leading to a noticeable increase in trading volume. Currently, BTC is experiencing simultaneous increases in price and volume, without any abnormalities. Will the BTC price continue to rise?
Bitcoin daily price chart (May 2023 - October 2023), Source: TradingView.
As of the time of writing, BTC is priced around $34,200, entering a new range where previous resistance levels have become support levels, and new resistance levels are set higher at $37,000. This indicates that there is still room for BTC price to rise, but short-term correction is needed.
Bitcoin daily price chart (January 2021 - October 2023), Source: TradingView.
In the past two days, BTC price has experienced rapid surges, causing deviations from major moving averages such as the 7-day, 30-day, 60-day, and 120-day. Both short-term and long-term moving averages require correction.
Bitcoin daily price chart (January 2022 - October 2023), Source: TradingView.
Normally, corrections occur in two ways: price pullback or sideways consolidation to trade time for space. Currently, given the high enthusiasm for the surge, a direct price pullback is less likely and a preference leans towards the latter, with BTC returning to the moving averages through continuous sideways consolidation.
While the probability of a price adjustment through a downward correction is low, it's also important to beware of any negative news from the SEC. If bearish news emerges at this time, it could immediately trigger a sentiment of selling off, dragging the BTC price back to $31,000.
