Bitcoin’s SLRV Ratio, a crucial price metric, is exhibiting a pattern similar to the one observed just before the FTX market crash, hinting at potential market movements.
Investors often underestimate the significance of a spot Bitcoin exchange-traded fund (ETF) approval on market dynamics, argue analysts from K33, formerly known as Arcane Research, a crypto research firm.
In a market report dated September 5, K33’s senior analyst Vetle Lunde and Vice President Anders Helseth pointed out that the past three months have significantly improved the likelihood of a spot Bitcoin ETF getting approval. However, they believe this positive sentiment hasn’t yet been factored into the prices of Bitcoin and other major cryptocurrencies.
The analysts highlighted that even though Bitcoin seemed to lose its upward momentum after Grayscale’s legal victory against the Securities and Exchange Commission (SEC), an ETF approval could lead to substantial capital inflow, driving up Bitcoin’s price.
Conversely, they noted that the downside of a spot ETF rejection would be minimal, and Bitcoin’s prices would likely continue as usual.
Lunde and Helseth further argued that considering the growing likelihood of spot ETF approvals (some Bloomberg analysts even suggest a 75% chance within a year), the market’s stance on ETFs is fundamentally flawed.
Lunde stated, “I firmly believe the market is wrong. This is undoubtedly a buyer’s market, and it’s imprudent not to accumulate BTC aggressively at current price levels.”
To support their bullish outlook, the analysts pointed to the recent 2% gain in the Nasdaq-100 index, a prominent indicator of the overall market’s risk appetite.
Additionally, Lunde and Helseth expressed optimism about Ethereum’s (ETH) price performance. They anticipate ETH to outperform Bitcoin in the next two months due to robust momentum leading up to the launch of a futures-based ETF.
They drew parallels to Bitcoin’s price trajectory, which surged approximately 60% in the weeks preceding the launch of the first Bitcoin futures-based ETF on October 19, 2021.
The decision on a futures-based Ether ETF is expected in mid-October, with reports suggesting it is likely to receive approval from the SEC. This could have significant implications for Ethereum’s price as it follows a path similar to Bitcoin’s historical performance before its ETF debut.