Spot Bitcoin ETF 'mostly priced in' as false approval got muted reaction, analysts say

2024-01-10 03:30:30

QCP Capital suggests this muted reaction to false spot Bitcoin ETF approval signals a potential that the event is already priced-in, highlighting Ethereum as a ‘laggard play.’

In a Telegram post on Jan. 10, analysts at Singapore-based QCP Capital addressed the recent false approval of a spot Bitcoin ETF published on the U.S. Securities and Exchange Commission’s X account, saying that failure to break through the resistance area after the news broke might be considered as a signal that a potential ETF approval “mostly priced in.”

Analysts at QCP Capital noted that amid the uncertainty, attention is now turning to Ethereum (ETH) as a potential laggard play, given that the performance of the ETH/BTC cross, which briefly dipped below the Jun. 22 low before rebounding above the 0.051 support, supports this notion.

“Options vols are also elevated now due to the ETF news event, and we expect vols to move lower and normalize once an ETF approval is out of the way. We see support at 40 – 42k, and resistance around 48.5k.”

QCP Capital

QCP Capital suggests a strategy of selling the spot-futures basis spread for a risk-free 12-17% annual return if held to maturity. Options volatility is currently elevated due to the ETF news event, with an expectation that it will normalize once the ETF approval uncertainty is resolved, the analysts added.

Moreover, QCP Capital does not rule out that BTC might go below the $38,000 mark, saying the level is considered “decent for a long position” in anticipation of the Bitcoin halving in April.

Meanwhile, legal representatives from the U.S. Securities and Exchange Commission (SEC) are urging an investigation into potential market manipulation. Additionally, American lawyers and senators are also calling for an investigation into the SEC due to false data. In particular, Senator Cynthia Lummis demanded that the SEC provide transparency into the events that led to the now-deleted post on X.

According to the social network’s official statement, the SEC’s X account was compromised “not due to any breach of X’s s, but rather due to an unidentified individual obtaining control over a phone number” associated with the regulator through a third party. As of press time, Bitcoin is trading at $45,668, according to CoinGecko data.

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