The Ethereum ETF Approval is Near? What's Next?

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In today's post, we will recap our last market review that was posted before the BTC halving and what I’m expecting the next few weeks.

• The BTC Halving Correction (Did we nail it!?)

• $ETH ETF Approval Odds increased? What’s next?
  
  Let’s dive in.

The BTC Halving Correction

On April 6th, I posted an in-depth write up on why I believe we would see a short / mid term correction in the crypto market. I provided a few reasons for this bias, but the main two were:

1. The S&P 500 & Nasdaq were setting up for a move lower. As I’ve mentioned if these markets move to a more risk off environment, then crypto will most likely follow.

2. Bitcoin & Ethereum had yet to have a move down into discount in their respected higher timeframe range. As I mentioned in the previous write up I stated that when in a bullish trend price will at some point seek some sort of discount respected to its range. In this case Ethereum was the asset that traded to that level, as Bitcoin traded to the March monthly low which was treated as support.

As shown above you can see we were looking for, at the time, previous months low to be ran and to see some sort of support there to start DCAing back into the market.

Looking at the current chart, it looks like we were magic wizards that predicted the market perfectly! To an extent, we had a very clean level that was hit and had a clean bounce, but there was no 100% certainty that we would bounce there; the probabilities just favored it.

Now you may be asking, "But I thought you wanted to see Bitcoin trade into the discount level off the range you had marked out?" Correct, but when looking at these markets, it’s important to see where Ethereum is trading as well.

As you can see above, Ethereum traded into its respected discount level from the range that was created prior to the move lower. Both assets DO NOT need to trade into discount, but we wanted to see AT LEAST one of them do so. This also indicates that Bitcoin is the stronger pair on the higher timeframes, as Bitcoin was unable to have that move lower into discount.

Ethereum ETF Approval Odds Increased? What’s Next?

Today, there was a spark in the crypto universe as the odds of the Ethereum ETF have increased from 25% to 70%, according to a Bloomberg ETF analyst.

This was later followed by another breaking headline from the SEC, asking exchanges to update their 19B-4 filings due to an accelerated basis for spot Ether ETFs.

Now, it is very important to understand that nothing has been approved, BUT the overall markets have moved towards a more risk-on environment with the Dollar Index falling, bonds on a slow rise, and indices back at ATHs.

With this current ETH narrative, I would imagine this will take the short-term spotlight away from Bitcoin, and ETH will start to gain some strength over Bitcoin on the lower timeframes.

If this bullish narrative sticks, meaning I would want to see the Dollar Index aggressively continue to trade lower to previous lows, then I think there are valid reasons to remain bullish on the risk-on markets.

When it comes to BTC/ETH, I believe if this risk-on environment continues, I would favor ETH to start gaining strength over BTC, which implies I would rather be more long on ETH than BTC.

During these types of runs where ETH rallies hard, BTC tends to lag behind or even consolidate, while ETH and altcoins run. This is the environment I expect over the next few weeks to months.

Conclusion

In conclusion, it’s important to be able to adapt to markets. The past 2-3 months we were more bearish. Why? Because the probabilities favored it. I look at the market as a machine, with different parts that keep it running. If multiple parts of that machine (Dollar Index, bonds/yields, indices, commodities, and many more) are favoring a more risk-off environment, then my bias will have to fit that narrative. That's exactly why we were bearish in March and April, as the markets were favoring that.

Now, with indices back at the highs, DXY starting to sell off, and bonds on a slow rise (which I’d like to see continue), it makes sense to be more on the short/mid-term bullish side as the order flow favors that for now. However, just like how we were able to shift from bearish back to bullish, you have to be ready to adapt if the market tells you to.

I will be sure to continue to update everyone on my stance on the market. As explained in this write-up, I am sticking with a continued risk-on mindset as long as we continue to see the DXY sell-off and continued bullish structure in the indices market (S&P 500, Nasdaq, Dow).

Always remember, there is no reason to force a trade. Let the market come to you..

I hope the above content has provided you with a better understanding of the overall market. If you have any questions, feel free to DM me on Twitter @NoticeTrades