Aaryamann Shrivastava
FXStreet
- Bitcoin price is observing a potential bullish divergence, suggesting the 6% decline of the day could be reversed.
- A report from Matrixport suggested that the SEC could reject the spot BTC ETF applications.
- Senior Bloomberg ETF analyst Eric Balchunas discredited this report, saying they have “heard nothing to indicate anything but approval.“.
Bitcoin price took a hit on Thursday, resulting in the entire crypto market noting a dip. The sudden drop in price was due to a panicked reaction from the investors after the emergence of a report from Matrixport. The publication took a negative stance about Bitcoin and price and ETF approval at first, which was soon countered by themselves, claiming BTC was headed to $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." The report, which countered the bullishness of the market, triggered a reaction from investors, prompting the 6.5% decline in Bitcoin price.
The scheduled approval date is still targeted between January 8 and 10. Balchunas noted that, at this point, it is not just he and James Seyyfart who are holding out an optimistic outlook but the entire crypto market.
This is because mainstream media, which does not report on developments in the crypto space until the information is cemented, is also holding a similar opinion.
As time moves forward and the likeliness of approval remains high over the next few days, there is a considerable chance for the Bitcoin price to reclaim $45,000 and rise further.
Technical Analysis: Bitcoin price is open to a rally
Bitcoin price, despite the correction, is still satisfying a crucial development on the charts, which is generally associated with a bullish outcome. The Bullish divergence formed when the price formed higher highs and higher lows, while the Relative Strength Index (RSI) formed lower lows and lower highs,
One good development is that despite the decline on Wednesday, the altcoin is still keeping above the uptrend line, treating it as support. Losing this line would certainly invalidate the bullish thesis and send Bitcoin price towards $40,000.
BTC/USD 1-day chart
But if the bullish divergence is executed successfully, BTC will continue its uptrend and recover to trade at $45,000, not too late now.
Crypto ETF FAQs
What is an ETF?
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Is Bitcoin futures ETF approved?
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 waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Is Bitcoin spot ETF approved?
Bitcoin spot ETF has been approved outside the US, but the SEC is yet to approve one in the country. After BlackRock filed for a Bitcoin spot ETF on June 15, the interest surrounding crypto ETFs has been renewed. Grayscale – whose application for a Bitcoin spot ETF was initially rejected by the SEC – got a victory in court, forcing the US regulator to review its proposal again. The SEC’s loss in this lawsuit has fueled hopes that a Bitcoin spot ETF might be approved by the end of the year.
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