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Analysis

BlackRock ETF could boost Bitcoin

BY Janne Muta

|June 22, 2023

Bitcoin nears the April high in anticipation of BlackRock's potential ETF approval by US regulators, which could significantly increase institutional investment in Bitcoin. Whether or not the SEC approves the proposed fund, significant volatility in the market is likely. Meanwhile, GBPUSD maintains a bullish trend despite yesterday’s decline following a slightly higher-than-expected headline CPI. Elevated yields keep gold bearish, possibly pushing the market down to 1914. At the same time, EURAUD continues its rally as the ECB is expected to hike rates once more, while the RBA might hold off.

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Bitcoin has rallied almost to the April high of 31 050 on anticipation that the world's largest money manager BlackRock might see its application for an ETF approved by the US regulators. The market is now trading near a resistance level (31 050) but if the ETF gets approval, the BTCUSD could have much more upside as more institutional money flows into Bitcoin.

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BTCUSD

We obviously can’t know whether the US regulator SEC will approve the proposed fund but if it does BTCUSD is likely to breach the nearest resistance level and could possibly start trending higher above it. This could take the market to 34 420 and possibly to 40 350 on extension.

As usual, trade only the price action not the expectations and remember to maintain proper risk management. If the fund isn’t approved, the market could trade lower and provide opportunities on the short side. In this case, we might see a move to 28 600 and then possibly to 27 800.

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GBPUSD

While GBPUSD trends lower in the 2h chart it is bullish above 1.2680 in the daily chart. Cable traded down to a structural support level at 1.2700 after the CPI was confirmed at a level only slightly higher than expected. Sterling bulls engaged the market at the May high.

The expectation is that the higher core inflation will force the BOE to hike both today and then again in August. Below, 1.2680, look for a move to 1.2620. Above 1.2680, a move to 1.2860 looks likely. Be ready to trade the BOE rate decision today at 11 am GMT.

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XAUUSD

Gold is bearish below 1945.20 and could trade down to 1914. Above the 1945.20 level, look for a move to 1954.52. Gold has been trending lower since early May when the US 10 yr yield started to move higher.

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EURAUD

EURAUD continues to rally as the ECB is expected to hike once more but the RBA might not. The market is bullish above 1.6140. Below the level, the market could trade down to 1.6080. Above the 1.6140 level, the market could move to 1.6260.

The next main risk events

  • USD - FOMC Member Waller Speaks
  • CHF - SNB Press Conference
  • GBP - MPC Official Bank Rate Votes
  • GBP - Monetary Policy Summary
  • GBP - Official Bank Rate
  • USD - Unemployment Claims
  • USD - Fed Chair Powell Testifies
  • USD - Existing Home Sales
  • GBP - Retail Sales
  • EUR - French Flash Manufacturing PMI
  • EUR - French Flash Services PMI
  • EUR - German Flash Manufacturing PMI
  • EUR - German Flash Services PMI
  • EUR - Flash Manufacturing PMI
  • EUR - Flash Services PMI
  • GBP - Flash Manufacturing PMI
  • GBP - Flash Services PMI
  • USD - Flash Manufacturing PMI
  • USD - Flash Services PMI

For more information and details see the TIOmarkets economic calendar.

Trade Safe!

Janne Muta
Chief Market Analyst
TIOmarkets

Tio Markets UK Limited is a company registered in England and Wales under company number 06592025 and is authorized and regulated by the Financial Conduct Authority FRN: 488900

Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

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Janne Muta

Janne Muta holds an M.Sc in finance and has over 20 years experience in analysing and trading the financial markets.