After falling as much as 7% on Wednesday due to a leverage flush and market reactions to analyst forecasts, Bitcoin (BTC) recovered some of its losses and was trading slightly around $43,000 in the early hours of Thursday in Europe.
According to Yield App’s chief investment officer Lucas Kiely, the biggest cryptocurrency might increase in value to $50,000 this month. Despite research suggesting otherwise, Kiely stated he believes the U.S. Securities and Exchange Commission (SEC) will allow a spot bitcoin exchange-traded fund (ETF).
After falling more than 10% in the previous day, major tokens like Cardano’s ADA, ether (ETH), and solana (SOL) began to stabilise early on Thursday. The market-tracking broad-based gauge saw its largest drop in recent weeks during that time, plunging 6%.
Memes like Shiba Inu (SHIB) and Dogecoin (DOGE) saw declines of more than 12%. One of the few winners was Sei Network’s SEI, which benefited from growing optimism.
The number of unsettled futures contracts, or open interest, dropped by $5 billion, the greatest decline in recent months, and north of $600 million in liquidations resulted from a late-night futures unwinding on Wednesday, the largest amount in a year.
At the same time that research firm Matrixport predicted “the SEC to reject all proposals in January” for a spot bitcoin ETF, the drop on Wednesday got underway. GreeksLive, an options analyst, expressed the market’s pessimism, citing “weakness in crypto mining stocks, and the sell-off in several crypto-related U.S. stocks” as reasons for the prognosis.
The SEC won’t approve a bitcoin spot ETF this month, according to Yield App’s Kiely, who took the opposite stance in a recent email.
“I think it’s still likely that we see an approval from the SEC in January,” Keily stated. The chairman of the regulatory body was specifically mentioned when he said, “There is too much pressure and expectation from the world’s biggest asset managers for Gary Gensler and the rest of the approval committee to keep kicking the can down the road.”
“I don’t think there will be a big sell-the-news event like some people have suggested. I believe that bitcoin will reach $50,000 by the end of January rather than dropping as low as $32,000, and this year will see a record print of BTC,” he stated.
Because of the possible approval of a spot ETF, companies like on-chain data provider CryptoQuant predict that bitcoin will fall as low as $32,000 next month. They claim that traders’ unrealized profits are currently sitting at a level that historically precedes a so-called correction, which for cryptocurrencies typically refers to a decline of 10% or more.