Bearish Trend Predicted as K33 Research Foresees Bitcoin ETFs Approval
With the verdict on spot Bitcoin ETFs just around the corner, market analysts are predicting a “sell-the-news” scenario. According to K33 Senior Analyst Vetle Lunde, there is a 75% chance of this outcome, overshadowing the 20% chance of approval. Lunde points to trader exposure and the significant premiums on derivatives as factors contributing to this prediction.
Despite some worrisome signs in the market, such as futures premiums reaching annualized levels of 50%, institutional players are still building long exposure in anticipation of ETF approval. In fact, open interest has surged by over 50,000 BTC in the last three months.
On the retail side, funding rates on offshore exchanges have reached an annualized high of 72%, indicating extreme anticipation among individual investors. However, due to the aggressive leverage from long positions, the impending ETF verdict could trigger long squeezes.
Bitcoin’s recent gains, surpassing $45,000, are closely tied to the growing anticipation of U.S. spot ETF approval. Analysts believe that there may be a potential peak in the current rally on the verdict date, as traders take profits and unsustainable premiums come into play.
Looking ahead, Lunde expects a net inflow of at least 50,000 BTC, equivalent to $2.3 billion, in January. This influx of capital will be crucial for sustained market growth. While a sell-the-news event may cause short-term fluctuations, the combination of potential spot ETFs and the Bitcoin halving event in April could contribute to a favorable market outlook as the year progresses.
