Bitcoin (BTC) experienced a recovery in European morning hours on Thursday, trading just above $43,000. This bounce back came after a leverage flush caused the cryptocurrency to drop as much as 7% on Wednesday. The market reacted to analyst reports, leading to the temporary decline. However, Lucas Kiely, the chief investment officer of wealth platform Yield App, remains optimistic about Bitcoin’s future. Kiely believes that the largest cryptocurrency could rally to as high as $50,000 this month.
One of the key factors behind Kiely’s prediction is the potential approval of a spot bitcoin exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC). Despite some analysis indicating that the SEC may reject all proposals for a spot bitcoin ETF in January, Kiely dismisses this notion. He expects the SEC to approve the ETF, citing the pressure and expectation from major asset managers. Kiely believes that the approval committee, led by SEC Chairman Gary Gensler, will not delay the decision any further. He predicts that Bitcoin will reach $50,000 by the end of January, with the potential for a record-breaking year.
While Bitcoin showed signs of recovery, other major tokens experienced significant drops. Solana (SOL), Ether (ETH), and Cardano’s ADA stabilized early on Thursday after declining more than 10% in the past 24 hours. The Market Index (CMI), a broad-based gauge tracking the market, also slumped 6% during the same period, marking its largest loss in recent weeks. Meme coins like Dogecoin (DOGE) and Shiba Inu (SHIB) fell more than 12%. However, Sei Network’s SEI stood out as one of the few gainers, benefiting from rising hype.
The market volatility on Wednesday was further intensified by a futures unwinding, resulting in over $600 million in liquidations. This marked the highest amount of liquidations in a year. Additionally, the number of unsettled futures contracts, known as open interest, experienced a steep drop of $5 billion, the largest decline in recent months.
The sell-off in several crypto-related U.S. stocks and the weakness in crypto mining stocks contributed to the market’s skepticism, according to options analyst GreeksLive. Research firm Matrixport also expressed doubt, expecting the SEC to reject all proposals for a spot bitcoin ETF in January. However, Yield App’s Kiely disagrees with these assessments. He believes that reports suggesting the SEC won’t approve a bitcoin spot ETF this month should be disregarded. Kiely anticipates an approval from the SEC and does not expect a significant sell-off event as some have predicted.
Despite differing opinions, firms like CryptoQuant, an on-chain data provider, anticipate a potential drop in Bitcoin’s price to as low as $32,000 next month. They argue that traders’ unrealized profits are currently at a level that historically precedes a correction, which typically refers to a decline of 10% or more in the cryptocurrency market.
In conclusion, Bitcoin experienced a recovery after a temporary decline, and Lucas Kiely of Yield App remains optimistic about its future. He predicts that Bitcoin could rally to $50,000 this month, expecting the SEC to approve a spot bitcoin ETF. While other major tokens stabilized or experienced drops, market volatility and skepticism persist. Firms like CryptoQuant anticipate a potential decline in Bitcoin’s price next month. The cryptocurrency market continues to be influenced by various factors, and investors closely monitor developments to make informed decisions.