After the Bitcoin ETF is passed, can it drive ETH up by 75%?

WORDS: ASHU GOLA

Compiler: Deep Tide TechFlow

JANUARY 10 IS THE DEADLINE FOR THE SEC COMMISSION TO MAKE DECISIONS ON BITCOIN ETFs, AND THE MARKET IS OPTIMISTIC ABOUT APPROVING BITCOIN ETFs. This key event could have a wide-ranging impact on the crypto market, including Market Cap second Crypto AssetsEthereum.

If the Bitcoin ETF is approved, the price of Ethereum could rise by up to 75% in the coming months.

Ethereum ETF

The approval of Bitcoin ETFs could set a regulatory precedent and pave the way for other Crypto Assets-based ETFs, as the approval of Bitcoin ETFs facilitates the establishment of a framework that applies to other Crypto Assets, including Ethereum.

In December 2023, the SEC postponed until May 2024 the decision to file several Ethereum ETFs in the United States, including the Hashdex Nasdaq Ethereum ETF, the Grayscale Ethereum Futures ETF, the VanEck EthereumSpot ETF, and the EthereumSpot ETF filed by Cathie Wood’s ARK Invest and 21Shares.

Delayed approval is part of the SEC process, and there needs to be a certain amount of time to gather public comment before deciding whether these ETFs should be listed. However, they also appeared in the course of the committee’s investigation into trying to classify some PoS (PoS) Crypto Assets as securities.

Interestingly, Ethereum was not listed as a security in any recent SEC lawsuits against Crypto Assets exchanges. The commission also did not challenge Ethereum’s classification through the Commodity Futures Trading Commission’s (CFTC) ETF registration process.

This increases the likelihood that the SpotEthereum ETF will be approved in the US in May 2024, which could boost the ETH price.

Ethereum-Bitcoin relevance

If the approval of the Bitcoin ETF does not turn into a “sell-the-news” event (i.e., an Unfavourable Information event), the price of Ethereum is expected to rise significantly due to the correlation with the BTC price in recent years.

Fundamentally, the approval of Bitcoin ETFs could lead to an increase in Crypto Assets investment by traditional financial investors. This, in turn, could cause the price of ETH to rise in response to the market’s expectation of increased demand.

Conversely, delaying or rejecting Bitcoin ETFs could lead to short-term pullbacks. A recent Bitwise survey found that only 39% of U.S. financial advisors believe they will approve Bitcoin ETFs this year. **

Technical Indicators

From the candlestick technical indicator, in recent days, the price of ETH is approaching the resistance trend line of its rising wedge pattern. A delay or rejection of the Bitcoin ETF could cause the price to pull back to the trend line below the wedge near $1865 in February.

The $1865 level coincides with ETH’s 0.236 Fibonacci line and its 50-week exponential MA (the red wavy line in the chart above).

On the other hand, the approval of the ETF could completely invalidate Ethereum’s rising wedge in favor of an rising triangle reversal pattern, as shown below.

If so, by March, Ethereum could rise to the triangle’s upside target near $3870, a 75% increase from the current price level, coinciding with the 0.786 Fibonacci line.