Bitcoin prices fluctuated around $66,000 during Friday’s Asian trading session, with analysts predicting continued volatility in the lead-up to the upcoming halving event. Semir Gabeljic, Director of Capital Formation at Pythagoras Investments, noted that the recent 10% drawdown aligns with historical patterns observed before halvings.
Meanwhile, the broader cryptocurrency market remained relatively stable, with the CoinDesk 20 index down slightly by 0.5%. However, the Digitization Index, tracking protocols like Ethereum Name Service, saw a 2.7% increase.
Singapore-based trading house QCP Capital observed a consolidation in the market, with Bitcoin and Ether trading within a tight range. They anticipate a calmer weekend following last week’s pre-FOMC volatility.
However, QCP highlighted significant outflows from the Grayscale Bitcoin Trust, suggesting diminishing market confidence in the imminent approval of a spot Ether ETF. This sentiment is echoed in prediction markets, with the probability of an Ether ETF approval by May 31st currently at a low 21%.
Adding to the uncertainty, the Ethereum Foundation is currently under investigation by a state authority, believed to be the Securities and Exchange Commission (SEC). The SEC’s stance on whether Ether constitutes a security remains unclear, further dampening hopes for a swift ETF approval.
Despite these concerns, Ether has seen a 1.2% rise, currently trading above $3,500. While blockchain bettors on Polymarket anticipate Ether reaching its all-time high in the second quarter, a significant portion believes no new highs will be achieved in 2024.
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