Bitcoin prices surged close to 10 percent in the past seven days, largely due to speculation regarding the upcoming ETF decision. Litecoin moved up slightly but remains in a downtrend. As usual, we start with bitcoin and we’ll come back to LTC/USD later in the article.
Bitcoin Surges $100 on ETF Speculation
Bitcoin prices rallied by over $100 dollars since last Tuesday to hit a high of $1,188 on FXOpen. On other exchanges, we’ve seen figures above $1,200. The move higher seems to be largely due to increased speculation about the upcoming bitcoin ETF.
The US Securities and Exchange Commission will decide by March 11 whether to approve ‘COIN’, a bitcoin ETF by Cameron and Tyler Winklevoss. On Friday odds for approval increased from 35 to 50 percent on the Bitmex ETF prediction market.
Traders are interpreting the latest submitted filling as a sign that the ETF may be approved. The changes by the Winklevoss were mainly cosmetic, increasing the number of shares but lowering their value by the same proportion. Earlier yesterday a prospectus was filled with the SEC to reflect these changes. This also spiked the odds to close to 50% after a weekend sell-off saw them back in the 35% range.
It’s hard to find reasons for an approval in these fillings but the market disagrees. This sets us up for a binary event with large consequences for the price. An approval or a denial would likely lead to a move of hundreds of dollars, up or down. A decision could come at any time between now and March 12th and it’s not sure how exchanges will cope with the large influx of orders and if stops will be honored. Conservative traders should consider reducing their position to the ‘sleeping point’.
Technically the rally will remain in place until we see a decisive breakdown below the $1,000 figure. But like we said above, there’s a risk of big slippage here so keep that in mind. With prices near all-time highs, there’s no visible resistance on the upper end beyond $1,185 dollars per coin.
Litecoin Inches Higher
Litecoin prices inched higher during the past week. We’re now quoted at $3.80, only 7 cents above the price noted last week.
Despite the gains, we are still in a downtrend. A breakout above the $3.874 swing high is needed to end it. A new rally requires a move above $3.94 dollars as well. On the lower end, support can be found at $3.52. This is closely followed by several potential support levels at $3.40, $3.36, $3.31 and $3.22 dollars. A breakdown below $3.22 could lead to extended losses.
FXOpen offers the world's most popular cryptocurrency CFDs*, including Bitcoin and Ethereum. Floating spreads, 1:2 leverage, 30% margin call, 0.01 lot minimum transaction size with no maximum — at your service. Open your trading account now or learn more about making your money go further with FXOpen.
*Cryptocurrency CFDs are not available to Retail clients in the UK