Potential ETF Launch Sparks Bitcoin Price Surge Amid Market Uncertainty

Bitcoin has seen a recent surge in value, rising an impressive 16% this week, crossing the $35,000 mark for the first time since the previous year. On the other hand, global stocks are floundering in the wake of heightened Treasury yields and intensifying geopolitical tension.

Enthusiasts of digital assets argue that Bitcoin spot ETFs, proposed by the likes of multinational investment management corporation BlackRock, will foster more widespread adoption of the cryptocurrency. However, with the timing of approval from the Securities and Exchange Commission (SEC) uncertain and recent crypto market upsets such as the FTX exchange bankruptcy, mainstream demand has faltered somewhat.

As activists watch eagerly for the ETF green light, market experts, including Hayden Hughes, the co-founder of the social trading platform Alpha Impact, predict a potential sell-off event in response to approval. This prediction is supported by technical chart patterns that suggest the recent Bitcoin rally may be overextended.

Despite uncertain conditions, Bitcoin maintains stability, valued at around $34,475 as of Thursday morning in London, representing a more than double increase since its 2022 slump.

Nonetheless, there are technical indicators suggesting possible hurdles for Bitcoin's bounce, such as a Fibonacci retracement zone at around $36,000. There are also expectations of short-term sell-offs if US spot Bitcoin ETFs gain approval. However, such ETFs are believed to bolster Bitcoin's long-term performance.

Meanwhile, Bitcoin's relative-strength index, a metric used to measure momentum, sits at a level over the critical 70-mark for the first time since last year, signifying that Bitcoin may be in the "overbought" status.

Perhaps it's not only anticipations for the ETF approval driving this frenzy but also potentially bullish factors like industry cleanup and a resurgent narrative of Bitcoin as an inflation hedge.

Achieving Bitcoin value of $40,000 by year-end is a notable prediction among bullish options bets on Deribit, the leading crypto options exchange. However, the SEC's decision concerning spot Bitcoin ETFs is one to watch, as a refusal may provoke legal challenges against the commission.