The price of Bitcoin experienced a significant increase of 10.7% following the news of the approval of iShares Spot Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC). This sudden buying pressure led to BTC breaking through the resistance level that has been functioning as a support line for approximately 95 days. However, there are some doubts about the sustainability of this upward momentum.
Bitcoin price surged as news spread about the approval of the iShares spot Bitcoin ETF by the SEC, breaking above the long-standing resistance trend line and rising from $27,143 to $30,127. This resistance level has been a significant obstacle against the upward trend for the past three months, helping sellers exert pressure on the price.
The news turning out to be fake caused the price to retract from above $30,000. As a result, the price of the largest cryptocurrency decreased, forming a long-tailed green candle on the daily chart. At the time of writing, the price of BTC is trading around $28,198 and attempting to stay above the recently broken trend resistance line. If it can hold above this level, there is a possibility for the price to test the $32,000 region with a 13.5% increase.
Although the short-term outlook is positive, investors need to be cautious against a possible downturn, considering the speculative nature of the recent price increase. If the price falls below this trend resistance line following the rise that followed the news, the losses in Bitcoin could escalate, and this surge could remain a “bull trap.”
In this scenario, an increase in selling pressure and an extension of the correction process can be expected. In a possible downturn, the price could pull back to the psychological support level of $25,000.
Furthermore, on the daily timeframe, the price being above the 20, 50, 100, and 200-day Exponential Moving Averages (EMAs) and the Relative Strength Index (RSI) being above the 60 level are positive indicators reflecting the bullish momentum in the market.