100 days to the halving — 5 things to know in Bitcoin this week

Bitcoin ( BTC ) starts the second week of 2024 at a key moment in its history — one which may shape BTC price action for a long time to come.

The United States is due to decide on — and should reportedly allow — its first spot Bitcoin exchange-traded fund (ETF).

Due by Jan. 10, the event comes after months of buzz and uncertainty, as well as years of failed launch attempts before that.

This time should be different, crypto industry sources believe, and as Wall Street prepares to open the week’s trading, a clear sense of anticipation pervades Bitcoin circles.

What will happen in the coming days?

Bitcoin traders have plenty to contend with — and not just the ETF. U.S. macro data is due, offering an update on the fight against inflation and potential volatility for risk assets.

However, with on-chain indicators pointing higher, confidence in upside continuation for BTC/USD is building in step.

Cointelegraph takes a closer look into the current state of the market as Bitcoin prepares for a crunch test of its mettle at the hands of regulators.

Bitcoin ETF showdown enters its final days

Like it or loathe it, this week is all about the spot Bitcoin ETF .

What has been years in the making is about to potentially see the light of day in what constitutes a make-or-break moment for institutional Bitcoin adoption.

The Securities and Exchange Commission (SEC) has divided the industry with its reluctant approach to certifying spot ETF applications. This is tipped to have changed, but at the time of writing on Jan. 8, no firm confirmation that the ETFs can trade has been received.

The U.S. is already a lone holdout when it comes to the products — spot Bitcoin ETFs already form part of the landscape in Europe and elsewhere, with just the United Kingdom forbidding them.

Uncertainty over the U.S. pivot has come in many forms, the latest among which was a rumor of political sabotage just days before the Jan. 10 final deadline.

This was subsequently dealt with by Bloomberg Intelligence analysts Eric Balchunas and James Seyffart, who together provide some of the most thorough coverage of the ETFs’ road to approval.

A quick note on people worried about a Gensler rug pull and SEC voting in relation to the #bitcoin ETFs https://t.co/Euj9HEcFjJ

— James Seyffart (@JSeyff) January 6, 2024

Laying out his own roadmap for the week, meanwhile, Nate Geraci, a dedicated ETF consultant, supported the odds of the SEC waving applications through.

“Key is 19b-4 approval orders, which I expect,” part of a thread on X (formerly Twitter) stated, forecasting a decision right at the deadline.

Geraci added that seeing the kind of capital available on launch day would be “fascinating.”

“Should be another wild week… Can’t wait to see how this all turns out!” he concluded.

Traders remain cool over what might happen to BTC price action even in the event of an SEC greenlight. A popular theory calls for snap losses followed by a slower recovery — a so-called “sell the news” phenomenon.

$BTC / $USD - Update

ETF anticipation plan. I remain in my long while we hold above $41,000 right now. My plan would be to take profit at the $47,000 - $50,000 region, and anticipate a sell off over the coming weeks

If the ETF is approved that is, if declined we drop first pic.twitter.com/4HJ9f1FkcP

— Crypto Tony (@CryptoTony__) January 8, 2024

However, the longer-term implications are clear for Michaël van de Poppe, founder and CEO of trading firm MN Trading.

“The Bitcoin ETF is going to have a massive impact to the crypto markets,” he told X subscribers on Jan. 7.

“Approx. $30-60 billion in liquidity flowing into the markets, through which Bitcoin will face a bull cycle comparable to the http://Dot.com bubble or Gold in 2004-2011.”

"Gradually then suddenly" for BTC price?

Short timeframes meanwhile reveal a “calm before the storm” on Bitcoin.

BTC/USD 1-hour chart. Source: TradingView

The weekly close came in at around $44,000, with BTC/USD continuing to act within a narrow trading range present since early December, per data from Cointelegraph Markets Pro and TradingView .

The start of Asia trading saw a reversal from closer to $43,000, but no firm trend had been established at the time of writing.

Analyzing the situation, popular trader Skew noted the need to preserve the 200-period simple (MA) and exponential (EMA) moving averages on hourly timeframes.

“Impulse swept previous high before sell off also weekly open. Key is to reclaim weekly open hold 1H 200EMA MA as support, initial triggers for being long imo,” he explained .

“Not chasing market for longs yet till triggers till orderbooks support with better bid depth.”

Skew also touched on the status quo regarding funding rates. These had been overly positive prior to last week’s liquidation flush, but have now reset to sustainable levels.

Market Funding rates
Expectedly neutral still, OKX has negative funding but that's cause they calculate it differently I believe

however for bybit binance very neutral (healthy)

No signs of froth yet despite the market being more long overall pic.twitter.com/bPhk6s3ddp

— Skew Δ (@52kskew) January 8, 2024

“Spot decides price direction next but in terms of net positioning there's probably a ton of longs in the market now so those longs will require spot bid from here,” a further post continued.

CPI week overshadowed

If the ETFs were not enough, Bitcoin traders must also contend with U.S. macro data prints this week.

These are key to the overall narrative surrounding inflation and Federal Reserve policy, with crypto markets looking for signs of unwinding interest rate hikes.

Jan. 11 and 12, respectively, will thus see the December prints of both the Consumer Price Index (CPI) and Producer Price Index (PPI). Both are known to spark short-term volatility across risk assets.

“Volatility is already back to kick off the New Year. Currently, we are 3 weeks out from the next Fed meeting,” trading resource The Kobeissi Letter wrote in part of commentary on an overview of macro diary dates.

Key Events This Week:

1. 10-Year Note Auction - Wednesday

2. Crude Oil Inventories - Wednesday

3. December CPI Inflation data - Thursday

4. Initial Jobless Claims - Thursday

5. December PPI Inflation data - Friday

6. Total of 4 Fed Members Speak

Crucial inflation data…

— The Kobeissi Letter (@KobeissiLetter) January 7, 2024

Kobeissi referred to the upcoming meeting of the Federal Open Market Committee, or FOMC, where any changes to rates will be decided.

Per data from CME Group’s FedWatch Tool , however, markets remain convinced that no significant shift in stance is to be expected this month.

Fed target rate probabilities chart. Source: CME Group

Indicators fuel Bitcoin bull case

When it comes to classic bull signals , Bitcoin on-chain indicators are providing optimism.

Continuing from last month, the relative strength index (RSI) is acting within neutral territory after diverging from rising spot prices on daily timeframes.

“Bitcoin Daily RSI slowly resetting during this consolidation inside of a pennant,” analyst Matthew Hyland summarized in a dedicated X post on Jan. 1.

“The RSI also reached its lowest level not seen since $27k during this consolidation. The trend is in an uptrend, which favors upside if in a continuation pattern which BTC currently is in.”

Bitcoin daily RSI data. Source: Matthew Hyland/X

Equally buoyant was popular commentator Trader Tardigrade, who looked to weekly RSI cues for bullish signals.

#Bitcoin weekly RSI shows the same action as the Bull run in 2015-2017. It initially had several buildups in over 1 year and then reached the first overbought zone.
RSI is expected to run forth and back above 50 and overbought area in next 2 years. $BTC will go pic.twitter.com/LD75TgHo3b

— Trader Tardigrade (@TATrader_Alan) January 8, 2024

Others are eyeing a breakout from rangebound BTC price action. The Bollinger Bands volatility indicator, still constricting, is suggesting that spot price will soon be acting in a much wider environment.

Is Bitcoin about to surge higher? The last 2 times the Bollinger Bands tightened to this extent, $BTC saw an explosive move higher. pic.twitter.com/5IXuVCt0KG

— Barchart (@Barchart) January 3, 2024

Bitcoin halving in 100 days and counting

In the background, another Bitcoin countdown is entering its final stages.

Related:  March banking crisis rerun risks 40% Bitcoin price crash — Arthur Hayes

This is the path to the next block subsidy halving , and estimates see it hitting in exactly 100 days’ time.

The event will reduce the block subsidy, or block reward, earned by miners per block by 50% to 3.125 BTC.

“Even though bitcoin's anticipated spot ETF has captured most of the industry's airspace, another value driver might actually occur before the spot ETF launch itself. That driver obviously is April's halving,” Timo Oinonen, a contributor to on-chain analytics platform CryptoQuant, wrote in one of its Quicktake posts on Jan. 7.

Miners face implications when it comes to profitability as a result of the halving, but so far, data shows ongoing reductions in their BTC balances.

According to on-chain analytics firm Glassnode , bitcoins held in miner wallets currently amount to 1.819 million BTC, down from 1.827 million BTC at the start of December.

Bitcoin miner BTC balance chart. Source: Glassnode

Oinonen meanwhile noted that technology firm MicroStrategy, which already has the largest corporate BTC treasury of any public company, tends to increase purchases in the run-up to halving events.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.