Yesterday, CBOE’s BZX Exchange withdrew its proposal concerning a rule-change that – had it been approved by the SEC – would’ve opened the path for the much-awaited VanECK/SolidX Bitcoin ETF. Interestingly, the markets were largely unfazed by news of the setback. Why did that happen? Are we dealing with bearish exhaustion or are there other factors at work behind the scene?
According to technical analysis, we are indeed looking at a situation which can only be defined as seller exhaustion. At this point, the question does have to be asked: who is really willing to sell BTC at these prices?
Technical analysis says we’re nearing a possible bullish breakout, as the price of the largest crypto has successfully defended the $3,500 level and it has indeed done so very convincingly thus far.
The daily chart offers a relevant glimpse into why the bears may be close to giving up: a downward-sloping triangle has developed over the last few days, with its bottom steady and the highs of its candlesticks growing progressively lower.
This is indeed a rather solid bullish indicator, and a daily close above the downward sloping trend line defined by these lower and lower highs, is thought to be enough to trigger the breakout. The price level to watch in this regard is the $3.6k one, as the above said trend line is currently slightly above it.
If this breakout were indeed to come, the first target of the bulls would be the $4,000 psychological resistance level.
Despite the fact that the odds really do favor the bulls (in the short-run at least) this time around, we need to consider the downside as well.
Breaking below the $3.5k level would neutralize the above described bullish setup, handing the reins of the price-action back to the bears yet again. Such a turn of events would open the path all the way to $3.1k, the support level defined by the low of December 2018.
What about those pesky fundamentals though? After all, they have been the ones dominating the overall picture lately.
More precisely: did the price really show no reaction to the (arguably) bad news about CBOE’s ETF withdrawal, on account of seller exhaustion? As always, there’s a lot more to this story than meets the superficial eye.
With the decision over a number of ETF proposals postponed several times as still others were squarely denied, and with the current partial government shutdown in place, it is safe to assume that such a scenario had long been factored into the price.
On top of that, what we’re looking at here – according to VanEck’s Gabor Gurbacs – is but a temporary withdrawal of the filing, as part of a calculated move sparked by the government shutdown.
With the shutdown in place, the SEC would most likely have denied the application, instead of letting it slip through on a technicality. With that in mind, the filing will be re-submitted when the time is deemed favorable.
With the VanEck people out of the BTC ETF picture for now, Bakkt remains the only “hope” of those looking to ease the flow of institutional money into the cryptocurrency space. Bakkt too has however already suffered on account of the shutdown, and with no potential resolution in sight for this ongoing administrative problem, it too is likely to be postponed yet again.
In other news: security tokens have grabbed quite a few headlines lately and now we might have a startup on our hands which says it can tokenize the shares of major companies such as Uber, SpaceX and AirBnB.
Hg Exchange will be launched in Singapore by crypto startups MaiCoin and Zilliqa.