- Bitcoin price is observing a potential bullish divergence, suggesting the day's 6% decline could be reversed.
- A coincidental report from a source named Matrixport suggested that the SEC might reject the spot BTC ETF applications.
- Bloomberg senior ETF analyst Eric Balchunas discredited the report, saying they had “heard nothing to suggest anything other than approval.”
Bitcoin price suffered a slump on Thursday, causing the entire crypto market to record a decline. The sudden price drop was nothing but a panicked reaction from investors due to the emergence of a report from Matrixport. The publication initially took a negative stance on Bitcoin, price and ETF approval, after which they soon countered by claiming that BTC is heading towards $50,000.
Daily Digest Market Movers: Bitcoin price crashes after Matrixport report
The report, which was also the reason for the crash, was titled “Why the SEC Will Reject the Upcoming Spot BTC ETF Applications.” Of course, any report that counters the market's upward trend is bound to trigger a reaction from investors, and that's exactly what can be said with the 6.5% decline.
The planned approval date is still the same, between January 8th and 10th, which basically means that the creative reports suggesting otherwise are largely unbelievable. Balnchunas pointed out that currently not only he and James Seyyfart have an optimistic outlook, but the entire crypto market.
This is because the mainstream media, which only reports on developments in the crypto space once the information is secured, also holds a similar opinion.
As time progresses and the likelihood of approval increases in the next few days, there is a significant chance that Bitcoin price will reclaim the $45,000 mark and continue to rise.
Technical analysis: Bitcoin price is open for a rally
Bitcoin price, despite the correction, is still meeting a crucial development on the charts, which is generally associated with a bullish outcome. The bullish divergence formed as price formed higher highs and higher lows, while the Relative Strength Index (RSI) formed lower lows and lower highs.
A good development is that despite the decline on Wednesday, the altcoin still remains above the uptrend line and considers it as support. A loss of this line would certainly invalidate the bullish thesis and push Bitcoin price towards $40,000.
BTC/USD 1-day chart
But if the bullish divergence is successfully implemented, BTC will continue its uptrend and rally to trade at $45,000, not too late.
Frequently asked questions about crypto ETFs
An exchange traded fund (ETF) is an investment instrument or index that tracks the price of an underlying asset. ETFs can track not just a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks the price of Bitcoin. ETF is a tool that allows investors to gain exposure to a specific asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still awaiting regulatory approval. The SEC says the cryptocurrency industry is new and vulnerable to manipulation, which is why it has delayed crypto-related futures ETFs in recent years.
The Bitcoin spot ETF has been approved outside the US, but the SEC has yet to approve one in the country. Interest in crypto ETFs has reignited after BlackRock filed for a Bitcoin spot ETF on June 15. Grayscale – whose application for a Bitcoin spot ETF was initially rejected by the SEC – won in court, forcing the US regulator to re-examine its proposal. The SEC's loss in this lawsuit has raised hopes that a Bitcoin spot ETF could be approved by the end of the year.