Bitcoin price has surged above $40,000 for the first time since April 2022, with a rally towards $44,000 occurring shortly after. However, this resistance level has proven to be stronger than expected, leading traders to question if a correction down to $41,000 is likely. The last 16 days have seen several rejections at $44,000, coinciding with increased chances of a spot Bitcoin exchange-traded fund (ETF) approval by January. Multiple issuers have amended their filings to comply with regulatory demands, including BlackRock, which updated its registration statements to exclude non-monetary payments. Some traders believe that the approval of a spot Bitcoin ETF will follow the “buy the rumor, sell the news” pattern, with most gains occurring before the regulatory approval. However, they expect a bullish outlook in the long term. The Bitcoin futures premium has remained above the neutral-to-bullish threshold since early December, indicating that traders have not changed their stance despite recent rejections. The balanced demand between BTC put and call options suggests that regulatory uncertainty may explain this. Despite the potential approval of a spot Bitcoin ETF, regulatory risk remains high, limiting investors’ appetite and strengthening the $44,000 resistance level. Nonetheless, Bitcoin whales do not appear concerned about the rejection, leaving room for further gains before the ETF approval. This article does not provide investment advice or recommendations, and readers should conduct their own research before making any decisions.
Derivatives Markets Reflect Traders' Optimism as Bitcoin Falls Short of $45K