The last couple of days weren’t exactly kind to the cryptocurrency markets in terms of fundamentals. Bad news came in after bad news and the tentative rally that BTC had attempted to stage a few days ago, was almost brutally extinguished. Responsible for the latest drop was the SEC’s decision to deny another lot of 9 ETF filings, although at this point one really has to wonder whether this ETF game is indeed worth any kind of reaction on the part of the market. Where to now?
The mini-rally that BTC has put together over the last handful of hours is proof positive that the industry is finally starting to treat these ETF-related “bad news” the way they should be treated, by shrugging them off.
That is not to say that the SEC’s announcement to kick yet another batch of 9 BTC ETF initiatives to the curb, did not elicit an effect. Indeed, the price of the crypto blue-chip dipped to around $6,230, before bouncing back and getting to currently flirt with the $6.5k mark again.
The significance of this little see-saw action shouldn’t be overlooked either though: despite all the media-induced hysteria, the price managed to defend one of its key support levels, and that’s more than a bit of silver lining in the current situation.
Although the technical factors have been pointing at an imminent rally in BTC price for days now, thus far no positive movement has been registered, due to the fundamentals all turning sour.
The current technical constellation is also rather rally-biased, as showcased by the above-mentioned defending of the $6.23k support level, and it is in effect forcing us to keep the possibility of a more significant short-term rally alive.
On the 4-hour chart, this defending of the said price-level meant that the price stayed above the rising trend line. In addition to that, the 50- and 100-candle MA’s have also turned northward, making it look like the least resistance is likely to favor the bulls.
To mess up this overall bullish technical picture, a clear break below the $6.23k mark would be required, and frankly, that does not look likely right now.
If it materializes, a rally would take the price to around $7,000, although further gains would likely be capped in the longer-run.
Despite the above said, the bird’s eye view version of the technical picture remains slightly bearish. As far as the oscillators are concerned, 2 of the most popular ones point to Sell, while only 1 says Buy. 8 remain Neutral.
Some 10 of the most popular MAs say Sell though, with only 4 pointing to Buy.
With the fundamentals having driven the price over the last couple of days, it is warranted to take a closer look at them.
As said, a lot of dust was raised by the SEC’s denial of another lot of ETF initiatives, though those who understand what ETF really are, are increasingly puzzled by the market’s reactions to such news.
An ETF provides a legal, safeguarded path to institutional actors into the volatile world of crypto trading. As such, it is kind of a big deal, though with the ICE’s Bakkt scheduled to go live in November, there’s not much point in lending a lot of importance to ETF initiatives like the ones that met their collective doom earlier today.
Bakkt will cover just about everything an ETF would and more, and it is backed by actors such as the NYSE and Microsoft. It apparently won’t allow leveraged trading and its buying and selling of BTC will be fully collateralized.
The futures contracts offered by Bakkt will be settled in BTC, unlike the ones currently featured by the CME and CBOE.