- Congress asked for immediate approval, while the SEC delayed its decision.
- Bitcoin could fall to $24,800 due to possible sell-off.
Some members of the US Congress have sided with the parties pushing for this Bitcoin [BTC] Spotting ETFs. In a joint statement on September 26, lawmakers Mike Flood, Wiley Nickel, Tom Emmer and Ritchie Torres asked the SEC to approve the applications without any delay.
Read Bitcoins [BTC] Price prediction 2023-2024
Bitcoin receives legislative support because…
According to the letter addressed to SEC Chairman Gary Gensler, the congressmen said the regulator had to show that it was not discriminating against spot Bitcoin products.
While quoting the law and referring to the Grayscale vs. SEC case, lawmakers noted that the SEC is currently violating the judgment by not approving it Bitcoin ETF applications on the table. For the members involved, the approval of the ETFs and the subsequent regulation makes room for investor protection. The statement told Gensler that,
“A regulated spot Bitcoin ETP would provide investors with greater protection by making access to Bitcoin more secure and transparent. Therefore, we urge you to immediately approve the listing of spot Bitcoin ETPs.”
After the public disclosure of the letter, Bitcoin’s social dominance rose to 20.79%. Social dominance shows the proportion of discussion that concerns a particular good. Therefore, the increase caused conversations around Bitcoin and topics surrounding it to quickly spread like wildfire due to its development.
However, social dominance was not alone metric with a change. On September 25, Bitcoin’s weighted sentiment was -0.079. After the development, the metric jumped into the positive region. At the time of writing, the weighted sentiment was 0.074.
An asset’s weighted sentiment describes the positive or negative perception that market participants have. This value is derived from the average negative or positive reactions surrounding the cryptocurrency in question. Thus, the climb into positive territory suggests that there were more positive comments about BTC than negative ones.
Source: Santiment
SEC counterattack says “It’s not time yet”
Unfortunately, the euphoria surrounding Congress’ involvement did not last long. This was because the SEC had also released its own statement. According to the committee, the applications from ARK Invest and 21Shares can be postponed once again.
While quote Section 19(b) of the Securities Act explained to the SEC that it had the authority to delay approval until January 10, 2024. It said:
“The Commission believes that it is appropriate to designate an extended period within which an order may be issued approving or disapproving the proposed rule change so that it has sufficient time to implement the proposed rule change, as amended by Amendment No .3, to be taken into consideration.”
Commenting on the SEC’s decision, James Seyffart noted that 21Shares and ARK Invest may not be the only companies that would be affected. He noted that others such as Fidelity VanEck and BlackRock could also face a similar situation.
Could this undermine hopes for an ETF approval this year? If they do go into Ark/21 shares, might we see delays in all other filings today as well? BlackRock, Bitwise, VanEck, Invesco, Wisdomtree, Fidelity & Valkyrie will all be released in mid-October… pic.twitter.com/XiFbxIrIRK
— James Seyffart (@JSeyff) September 26, 2023
Meanwhile, Bitcoin’s price seemed largely unaffected by the back and forth between the SEC and the US Congress. At the time of writing, the king coin was exchanging hands at $26,249.
However, BTC could be on the brink of another correctionbased on an analysis by on-chain analyst Tarekonchain.
To reach this conclusion, Tarekonchain looked at the foreign exchange reserves, the Coin Days Destroyed (CDD) and the Spent Output Age Bands. The CDD looks at the period during which a cryptocurrency remained inactive before being moved.
When the benchmark is high, it means that long-held coins are moving in large quantities and holders may be exposed to selling. When the CDD is low, it means that the long-held coins are slowing down the movement.
BTC’s next direction is still down
According to the graphic shared by the analyst on CryptoQuant, the seven-day CDD inflows on the exchange had increased. So there is a high chance that the sell-off ends up in a BTC correction.
Source: CryptoQuant
For the Bitcoin Spent Output Age Bands (SOAB), Tarekonchain noted that the 12-18 month Bitcoin bands also had the potential to sell off. The SAOB is a metric that groups issued coins into categories while identifying periods of on-chain transactions that are affected by HODLers or new market participants.
In concluding on the status of this metric, Tarkeonchain noted that:
“Bitcoin in the 12 to 18 month range is coming to market, possibly indicating a sale. However, Bitcoin is typically held for 6 to 12 months, indicating continued confidence in Bitcoin’s long-term prospects.”
Finally, the analyst also looked at the cash exchange grid current and the exchange reserves. Usually high values in the reserve assign high selling pressure and low values indicate the opposite.
At the time of writing, Bitcoin exchange reserves were peaking. This indicates increased trading activity on the exchanges and possible upcoming sales.
Source: CryptoQuant
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This increase indicates increased trading activity on the exchanges and possible upcoming sales. Tarekonchain further concluded that Bitcoin had a tendency to fall below $25,000. He wrote,
“The Bitcoin market is experiencing mixed activity, with both short-term and long-term investors participating. While we may see minor price swings, there is currently no conclusive evidence pointing to a break below the $25,200-$24,800 support zone.”