Crypto News: Bitcoin-Spot ETF Optimism a Much-Needed Tailwind

Key Insights:

• Optimism toward the SEC approving BTC-spot ETFs delivered much-needed support to BTC and ETH over the weekend.
• Amidst increasing regulatory scrutiny, the UAE released a whitepaper, with OKX, to tackle the regulation of the metaverse.
• Geopolitics and SEC vs. Coinbase and Ripple case-related news warrant consideration.

US Bitcoin Spot ETFs Could Be on the Crypto Horizon

Investor optimism toward the SEC approving BTC-spot ETFs delivered positive gains for BTC and the broader market.

Bloomberg Intelligence ETF Analyst James Seyffart recently raised the chances of a crypto-spot ETF approval. Seyffart put the probability of the SEC approving the Ark BTC-spot ETF application at 90%. The deadline for a decision is January 10, 2024.

Seyffart attributed the 90% chance of approval to recent updates to the Bitcoin Spot ETF prospectus, which added at least five pages of new content. Notably, Seyffart believes the new content signaled “a constructive conversation with the SEC – a step that typically occurs when a fund is on its way to being approved.”

Seyffart also discussed the Grayscale application, saying,

“Dialogue between Grayscale and SEC should begin next week. Hoping for more info on next steps sometime next week or week after?”

UAE Unveils White Paper on Metaverse Regulations

The United Arab Emirates (UAE) AI Office published a whitepaper, Responsible Metaverse Self-Governance Framework. The UAE AI Office worked with OKX to prepare the whitepaper.

On Friday, OKX issued a press release,

“OKX, a leading Web3 technology company, is pleased to announce that it contributed to the whitepaper on Responsible Metaverse Self-Governance published by the Minister of State for Artificial Intelligence, Digital Economy, and Remote Work Applications Office of the United Arab Emirates.”

The statement went on to say,

“The paper stresses the importance of international cooperation to establish self-regulatory principles that ensure the metaverse’s transparent, safe, and ethical operation.”

The whitepaper estimated investments of more than $120 billion in the metaverse by mid-2022. Notably, the Dubai Metaverse Strategy estimates the metaverse will add $4 billion to its economy and support 42,000 jobs by 2030.

Technical Analysis

Bitcoin Analysis

BTC sat above the 50-day and 200-day EMAs, sending bullish price signals. Significantly, the 50-day EMA avoided a bearish cross through the 200-day EMA.

A BTC return to $27,500 would support a move toward the $28,187 resistance level. Positive sentiment toward the SEC approval of one, some, or all of the BTC-spot ETF applications would drive buyer appetite for BTC.

However, a break below the 50-day and 200-day EMAs would bring the $26,755 support level into play. Risk aversion stemming from the Middle East conflict and a hawkish Fed would test buyer appetite.

The 14-Daily RSI reading of 51.84 indicates a BTC return to $28,000 before entering overbought territory.

Ethereum Analysis

ETH stayed below the 50-day and 200-day EMAs, reaffirming bearish price signals.

An ETH return to $1,600 would support a break above the $1,626 resistance level. Crypto regulatory chatter and ETH-spot ETF-related news updates will influence investor sentiment.

However, a fall through the $1,502 support level would give the bears a run at $1,450.

The 14-Daily RSI reading of 41.00 suggests an ETH fall to the $1,502 support level before entering oversold territory.