Gareth Soloway, a trading expert and chief market strategist at InTheMoneyStocks.com, has pinpointed two crucial factors that could significantly influence the price of Bitcoin (BTC) in the upcoming months.
Soloway’s insights come when Bitcoin has entered a consolidation phase, and market observers are suggesting the possibility of an upcoming rally.
#1 Spot Bitcoin ETF
During an appearance on The David Lin Report on August 11, Soloway first emphasized the importance of monitoring the potential impact of a spot exchange-traded fund (ETF) approval. Notably, the approval of such an ETF would represent a significant milestone for the cryptocurrency industry, potentially attracting greater institutional investment and mainstream recognition of Bitcoin.
He mentioned that the highly anticipated ARK Invest spot ETF experienced a delay in its approval process.
“Number one, an ETF. A spot ETF would be a big event. I did hear that the ARK Invest spot ETF got delayed. It didn’t get rejected, but it got delayed, so there’s no new news there. Bitcoin did downtick a little bit on that news, but nothing major,” he said.
Soloway’s analysis underscores the need for investors to remain vigilant regarding any developments concerning ETF approvals or potential delays, as these factors could lead to short-term fluctuations in Bitcoin’s price
It’s noteworthy that the market recently received a boost after BlackRock (NYSE: BLK), the world’s largest investment management firm, applied for a spot Bitcoin ETF. This move is particularly significant given the firm’s positive track record with the Securities and Exchange Commission (SEC).
#2 Government bond yields
Additionally, Soloway advised Bitcoin investors to closely monitor government bond yields, particularly the 10-year Treasury yield. He pointed out that if the 10-year yield were to surpass the 3.3% threshold, it could potentially create additional pressure on Treasury bonds and trigger selling by the U.S. government.
Soloway linked this potential scenario to the historical correlation between yields and Bitcoin’s performance. He noted that back in October, during a market downturn, yields peaked at 3.3%. If this level were to be breached again, it might lead to heightened selling of bonds by the U.S. government, potentially impacting Bitcoin and other assets.
Furthermore, Soloway reminded investors of the substantial U.S. debt and the challenges it poses to the nation’s financial stability. With the U.S. paying trillions of dollars in interest on its debt, the potential consequences of rising yields on the broader economy could indirectly influence cryptocurrency markets.
Bitcoin halving caution
Currently, the market is anticipating the Bitcoin halving to trigger a Bitcoin rally potentially; however, the strategist holds a differing opinion. He pointed out that while there are expectations for the halving to serve as a catalyst, this event occurs within a distinct macroeconomic environment potentially marred by an impending recession.
“Not only about the recession, but have we ever had a halving where the FED has a tight end aggressively and is not lowering interest rates and printing money in quantitative easing, and that’s another thing. < …> I would just caution people is that that it doesn’t usually work out that way,” he added.
Regarding price movement, Soloway said he expects Bitcoin to ‘flush out’ back to $20,000 by the end of the year before rallying again, mainly powered by increased adoption of the maiden crypto.
Watch full interview below:
