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October 21st, 2024

Bitcoin Momentum Breaks Structure as ETF Options Gain Approval

  • Pace of ETF Inflows Slow: Last week closed with $275M in inflows for Bitcoin ETFs.
  • Bitcoin Breakout: Bitcoin has consolidated above $69,000, confirming a structural breakout.
  • Bitcoin Spot ETF Options Approved: The SEC's approval of Bitcoin spot ETF options could have a positive impact on Bitcoin's price and liquidity.

After averaging $420 million in daily inflows over five days, Bitcoin ETFs concluded the week with a reduced but still significant $273M. Ethereum followed with $2M in inflows. Although institutional support remains robust, the slowdown suggests momentum could further weaken if inflows do not pick up again in the coming days.

Bitcoin maintained strength by climbing to $69,000 on Sunday, signaling a breakout from its previous downward trend. Technical indicators point to a slowing of momentum, suggesting Bitcoin could consolidate at this level before making another upward push. Such consolidation at this price would represent a bullish setup as Bitcoin eyes $70,000 and its March ATH.

The SEC’s approval of options for Bitcoin ETFs could substantially impact Bitcoin’s price dynamics. First, it gives analysts more tools to assess institutional demand and overall market activity. Second, the broader range of investment strategies offered by ETF options makes Bitcoin ETFs more appealing. Finally, additional liquidity from options trading could help stabilize Bitcoin's historically volatile price.

As Bitcoin consolidates above $69,000, we may enter a quieter phase with lower volatility, leading to a potential acceleration. We remain confident in the bullish momentum and do not anticipate a trend reversal. Therefore, we recommend maintaining heavy exposure to maximize potential profits.

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