All eyes are on the launch of a spot Bitcoin ETF, with the announcement expected to be just under three weeks from now. This was according to QCP Capital’s observation which said that an approval could arrive either at the market close on January 5th or sometime between January 8th and 10th in 2024.
Every ETF provider has complied with the SEC’s requirement for “cash only.” In such a scenario, the topside resistance for Bitcoin stands at a range of 45-48.5k, with a potential pullback to the 36k levels before the upward trend recommences.
The crypto investment firm based in Singapore disclosed that the final hurdle of choosing between “cash only” and “in-kind” has been resolved. As such, all ETF providers have abandoned the search for a middle ground and have acquiesced to the SEC’s insistence on a “cash only” approach.
As a result, QCP Capital believes Bitcoin could encounter resistance within the 45-48.5k range with a potential retracement to levels around 36k before the upward trend starts again.
While a surge appears to be imminent, the firm said that for those already invested in Bitcoin, a strategic move at this point could involve selling some covered calls to capitalize on the heightened forwards and volatilities.
“We are confident that the trend higher will eventually continue (perhaps after a few weeks) as the market positions for a strong rally into the BTC halving. If one is already long BTC, a tactical play here would be to sell some covered calls, taking advantage of the elevated forwards and vols, and perhaps also buy some out-of-the-money puts to trade the post-ETF dip.”
Despite the focus primarily centered around Bitcoin, Ethereum could present a compelling opportunity as a lagging asset. According to QCP Capital, the market’s anticipation may swiftly shift towards the spot ETH ETF, potentially prompting a shift from Bitcoin to Ethereum.
The investment firm further said that while the launch of a spot ETH ETF is still several months away, that wouldn’t deter recently approved spot BTC ETF providers from promptly seeking the greenlight for such a product tracking Ethereum. This type of “headline excitement” has the potential to generate speculative enthusiasm for Ethereum prices, whether warranted or not.