After a meteoric rise from $26,750 on Oct. 12 to close the month at $34,667 on Oct. 31, Bitcoin price (BTC) is still rising in November. BTC pumped from the $36,500 handle to multi-day support at $37,400 the day Grayscale Investments met with the SEC over its Bitcoin ETF application.
But its gains have seen more volatility this month, whipsawing on a course for $38,000 as Bitcoin ETF bulls hold their breath. That could be a sign that bears are gaining confidence. Meanwhile, bulls may be losing steam the longer markets wait on an SEC approval.
SEC Approval vs. Operation Timelines Key
Long-only crypto hedge fund Off The Chain Capital’s president, Brian Dixon, recently said he doesn’t expect a big rally when the SEC finally approves one or more Bitcoin ETF products:
“You’ll probably see a short-term increase and then a drawdown. But then, when they become operational, that’s when we’ll see the much larger increase.”
Dixon added, however, that he believes there’s plenty of demand from traditional markets, “I believe there’s a lot of institutional investors … waiting for regulated on-ramp.” But he says the difference between approval and operation timelines is going to be key.
Bitcoin ETF Bears Caution BTC Is Overbought
His prediction echoes a similar one made by Peter Schiff. The Euro Pacific Capital founder and chief strategist said in late October that a Bitcoin ETF approval “will mark the top of the rally.”
Schiff warned a sell-off could materialize sooner.
Meanwhile, Steno Research crypto analyst Mads Eberhardt says markets have overbought the Bitcoin ETF story. In a thread on X.com, Eberhardt wrote:
“However, in contrast to another prevailing market consensus, our expectation diverges; we anticipate that the introduction of the ETFs will exert more selling pressure than buying in the short term…”
Is the Bitcoin ETF story overbought?
Tremendous analysis from @MadsEberhardt below 🙏
There is a broad consensus in the crypto industry that Bitcoin spot ETFs are coming. We share that view. In fact, we are extremely confident that we will see a spot ETF in early 2024.…
— AndreasStenoLarsen (@AndreasSteno) November 23, 2023
The Steno analyst argues this bull market is unsustainable because it is driven primarily by a single narrative. J. P. Morgan analysts led by Nikolaos Panigirtzoglou agree. The team said the BTC rally is “overdone” in a note published Nov. 15.
Technical analysis furnishes some evidence to support the Bitcoin ETF bears’ thesis. Bitcoin price RSI (Relative Strength Indicator) began a bearish divergence from BTC’s green candles in November. That bearish delta between the price and the RSI of the asset has widened as markets approach December.
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