Bitcoin has risen above $45,000 at the beginning of the year, is it time to "sell news"?

Author: BitpushNews Mary Liu

With the results of US SpotBitcoin ETF approvals on the horizon, Bitcoin managed to break above $45,000 at the start of the new year for the first time since April 2022. After the U.S. stock market opened on Tuesday, Bitcoin hovered around $45,000, up nearly 2% in 24 hours and up 13% in 30 days.

The decision to BitcoinSpot ETF is expected to be made between January 8 and 10, however, Vetle Lunde, a senior analyst at K33 Research, predicted in a note that the news of the approval is highly likely to be a “sell news” event.

“Everything indicates that traders face considerable risk ahead of the verdict, with Derivatives pushing up huge premiums after Bitcoin’s sustained upward momentum over the past three months,” Vetle Lunde wrote in the report. Selling a news event could become a self-fulfilling prophecy, as a large proportion of short-term market participants have taken profits on the news."

Vetle Lunde believes that there is a 75% chance that a “sell news” event will occur, while a 20% chance of driving the price higher. In addition, ETFs still have a 5% chance of being rejected.

ETF bubble

Noelle Acheson, author of the Crypto is Macro Now newsletter, said: "If the SEC doesn’t give the green light, does that mean the BTC price will drop significantly? Speculation does seem to be a bit ahead of its time, with Bitcoin money Intrerest Rate (the cost of a long position in perpetual futures, an indicator of traders’ sentiment) climbing sharply over the past week. ”

Analysts noted signs of a bubble in the market, with contango on the CME surging to an annualized 50% level as institutional participants showed approval expectations by continuing to build long positions.

Close position has grown by more than 50,000 BTC over the past three months, Lunde added, saying: “At current premiums, maintaining CME exposure involves rolling costs of 1-2% per month – medium-term carry-over costs before critical events are acceptable, but not sustainable in the long run, especially when cheaper exposure alternatives emerge.”

On the retail side, the funding rate for offshore exchanges also reached an annualized high of 72% in the BitcoinRebound. K33 Research said: "With the ETF ruling a week away, the reluctance of bears to enter the market has increased the perpetual premium in the spot market and made long maintenance costly. In the wake of the ETF verdict, aggressive leverage by the bulls could lead to a bullish squeeze in the market. ”

Fall first and then rise

Lunde added that while the money may come from products such as futures-based ETFs, the “key factor” is the net inflow of new money, which should be at least 50,000 BTC ($2.3 billion) in January.

Lunde expects the current Bitcoin price increase to peak on ETF adjudication day due to massive profit-taking and unsustainable premiums from short-term traders. However, in the long run, the inflow of money into potential Spot ETFs, coupled with the supply shock from the April BitcoinHalving event, will drive prices higher over a longer time frame.

Trading team Stockmoney Lizards has a more optimistic view on the BTC price, which is expected to hit a new all-time high by the end of 2025. Macroeconomic factors (US recession, Inflation) also need to be taken into account, analysts say. However, this is ultimately not a bad thing for Bitcoin, with Stockmoney Lizards saying: "More and more people see Bitcoin as ‘digital gold’ and an inflation-proof asset (once adopted on a large scale) as a store of value in times of economic downturn. Therefore, we do not believe that the current Bull Market will end anytime soon. ”