Bitcoin on Friday erased all of its gains from an otherwise winning week after the first-ever spot bitcoin exchange traded funds were cleared to begin trading in the U.S. The ETFs are widely regarded as long-term positive price catalysts for bitcoin. As familiar and regulated investment vehicles, they’ll help draw new capital into the flagship cryptocurrency, driving demand higher as supply stays fixed, as mandated in the Bitcoin code. Many investors and analysts have expressed confidence that bitcoin can reach and even surpass its all-time high level of $69,000. Before that happens, however, bitcoin could see further pullbacks. “[Thursday’s] rejection at $48,000 is notable marking the March 2022 peak,” Oppenheimer senior analyst Ari Wald told CNBC. “I can’t help but think a sell-the-news scenario is developing with the launch of the bitcoin ETFs … the reversal at resistance can be viewed as a contrarian signal to reduce.” Hefty unrealized gains Many had expected the long-awaited bitcoin ETF approvals to be a sell-the-news event . Investors and miners have been sitting on high unrealized gains as the ETF narrative drove bitcoin up by more than 60% in the past three months. Bitcoin slid more than 5% on Friday to $43,858.23, according to Coin Metrics. The current support level is $43,000, according to Wald. BTC.CM= 1Y line Bitcoin’s 1-year performance per Coin Metrics He said $40,000, a level bitcoin hasn’t seen since early December, would be another potential stopping point. Julius de Kempenaer, a senior technical analyst at StockCharts.com, is watching a slightly higher support level at $45,000. Wald also pointed to the daily relative strength index, a momentum indicator that measures the speed and change of price movements, which recently showed that a bitcoin pullback could be in sight. An RSI reading of 70 and higher indicates that an asset is overbought, while a reading of 30 suggests it’s oversold. “While bitcoin’s price is coming off a new cycle high, RSI made a lower high and was unable to get above the 70 level,” Wald said. “We think this is another indication that price is due for a breather.” New record could be in sight Both Wald and de Kempenaer said bitcoin’s overall uptrend is still intact, however, and could carry the cryptocurrency to a new record this year. “Once the resistance area near $48,000 gives way … that will free up the way for the continuation of the rally, and the all-time high area near $69,000 will certainly come into sight,” de Kempenaer said. Bitcoin reached its all-time high near $69,000 in November 2021. Wolfe Research’s Rob Ginsberg agreed. “It is not yet overbought, so I could see it working higher into the heavy $48,000-$50,000 resistance zone in the near-term,” Ginsberg said. “Here is where the real work begins, but I would expect it to eventually break out following some digestion and backfilling.” “Once out,” he added, “November 2021 highs of $69,000 are in play.”
