Bitcoin
and other cryptocurrencies slipped Wednesday but continued to hold onto the bulk of gains from a recent rally. Crypto bulls have remained optimistic that U.S. regulators will approve a major new digital asset fund.
The price of Bitcoin has fallen 1% over the past 24 hours to $30,325, with the largest crypto firmly above the psychologically important $30,000 level but shy of yearly highs near $31,500 notched in recent trading. Bitcoin has rallied some 20% in less than two weeks, buoyed in large part by optimism over what would be a milestone of long-awaited institutional adoption: the potential approval of a Bitcoin exchange-traded fund (ETF) proposed by
BlackRock
(ticker: BLK).
“Bitcoin has been squeezed in the $30,000 to $30,800 range, above a similar consolidation in April, and has settled into an overall uptrend,” said Alex Kuptsikevich, an analyst at broker FxPro. “The shorter-term picture, however, suggests potential correction exists, with short-term targets in the $29,800 area, but a pullback to $28,900 is more likely. This should not put the bullish trend in question but will fuel further buying.”
Crypto bulls continue to pin their hopes on the possible approval of BlackRock’s Bitcoin ETF. While ETFs that hold Bitcoin itself—as opposed to Bitcoin futures—have been denied by regulators in the past, new hopes hinge on factors including a market surveillance mechanism proposed by BlackRock and
Nasdaq
(NDAQ).
In the short-term, Bitcoin is likely to continue meandering above $30,000 amid smaller macroeconomic catalysts. The token fell Wednesday alongside tech stocks, coming under pressure from fears over U.S.-China tensions linked to chips and artificial intelligence. Bitcoin could, like the
Dow Jones Industrial Average
and
S&P 500,
also react to a spate of remarks from central bankers including Federal Reserve Chairman Jerome Powell.
But investors should brace for the prospect of a Bitcoin ETF approval or denial as the next major catalyst for cryptos.
“If we do see a Bitcoin ETF approval, institutional momentum could take the rally as high as the $40,000 level,” said Edward Moya, an analyst at broker Oanda. “Any major setbacks with a BlackRock ETF rejection … could temporarily kill the rally, but optimism will still remain.”
Beyond Bitcoin,
Ether
—the second-largest token—lost 1.5% to below $1,875. Smaller cryptos, or altcoins, were weaker, with
Cardano
falling 3% and
Polygon
declining 5%. Memecoins were also in the red, with
Dogecoin
down 2% and
Shiba Inu
down 3%.
Write to Jack Denton at [email protected]
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