Bitcoin ETF hype fails to shake bearish $20K BTC price targets
While Bitcoin may have recently reached 17-month highs, there is a theory suggesting that the launch of a Bitcoin Exchange-Traded Fund (ETF) could potentially result in a "sell the news event." In financial markets, a "sell the news event" refers to a situation where an asset's price experiences a decline after a highly anticipated news event or announcement has already taken place. This phenomenon occurs because investors, who had been speculating on the positive impact of the news, start selling their positions after the event occurs, causing a price drop. In the context of Bitcoin and its ETF launch, this theory suggests that the price of Bitcoin may have already factored in the positive expectations surrounding the ETF, and once the ETF is officially launched, some investors might decide to take profits or reduce their positions. This selling pressure could potentially lead to a decline in Bitcoin's price. It's essential to understand that market reactions to news events can be unpredictable, and not all investors will respond the same way. Some may choose to buy the dip, while others may indeed sell. Market sentiment and various factors play a role in determining the outcome. Traders and investors should exercise caution and consider their strategies carefully in light of such theories.
David Becker 
Bitcoin (BTC) reached 17-month highs around October 24, driven by excitement over the potential launch of a Bitcoin Exchange-Traded Fund (ETF). The price of BTC hit $35,198 on Bitstamp, marking a 17% gain since the previous week's close and the highest levels since May 2022. The optimism around Bitcoin was fueled by the possibility of a Bitcoin spot price ETF being launched in the United States. While no official approval had been granted at that time, it was widely expected to happen soon.
This development led to a surge in inflows into public Bitcoin ETFs worldwide, equivalent to 10% of the year-to-date total in just a 24-hour period. If the U.S. Securities and Exchange Commission (SEC) were to approve one Bitcoin ETF, it could pave the way for other similar approvals. Bitcoin was also seen as a safe-haven asset amidst growing geopolitical tensions.
Despite the bullish sentiment, there was a disconnect between traders and market trajectory. Some traders remained cautious, with concerns about the absence of further CME Group Bitcoin futures gaps above the spot price. There was speculation that Bitcoin's price could drop to $20,000, a level associated with a CME gap and an important psychological boundary.
Some traders and analysts chose to take profits during this price rally, anticipating that the market may sell off after the official ETF announcement, even though the exact timing was uncertain. While Bitcoin's price was surging in 2023, there were doubts about whether these gains differed significantly from previous upward movements, and some analysts suggested the possibility of a price drop in Q1 2024 based on historical price cycles.
