As reported by NewsBTC on Thursday, the U.S. SEC rejected a revised proposal for a Bitcoin ETF backed by the Winklevoss Twins. The market instantly took a dive, with Bitcoin and a majority of altcoins posting 4-5% losses on the day. The speedy transfer downwards led some to ask “was this decline actually warranted or was all of it an overreaction?”
Bitcoin Recovers $400 After The SEC Verdict
As aforementioned, the market didn’t initially react in sort to the SEC’s choice concerning the Winklevoss-backed exchange-traded fund (ETF). Within the hours following the discharge of a ninety-two-page report highlighting the explanations for rejection, Bitcoin fell to a day by day low of $7,800 from $8,200. Regardless of the decision solely straight affecting a Bitcoin-based ETF, altcoins intently mirrored Bitcoin, posting comparable losses.
Nonetheless, at 3:00 PM UTC, the cryptocurrency market skilled an inflow of shopping for quantity, with Bitcoin quickly returning to the pre-announcement value ranges at ~$8,200.
Many attributed this expedited bounce to traders collectively realizing that market response to the SEC ruling was irrational. As duly identified by cryptocurrency researcher Alex Magnus, nearly all of cryptocurrency traders weren’t cognizant of the Winklevoss’ revision, because the announcement of the refiling slid beneath the radar of most.
This newest etf narrative has been constructed across the VanEck SolidX submitting. Most individuals weren’t even conscious that the Winklevoss etf was nonetheless in play after March ‘17 rejection. Commissioner Pierce’s dissent appears to have fueled the brand new etf anticipation.
— Alex Magnus (@alexmagnusBTC) July 28, 2018
The notice, or lack thereof, concerning the ETF revision, was clearly seen as CNBC broke the information, as many have been swift to name it outdated information rehashed. In brief, it has turn out to be obvious that the absence of consciousness resulted in an irrational slide downwards, as particulars have been initially sparse. So it could solely make sense why Bitcoin would see a reversal because the market cooled off.
Others related Bitcoin’s restoration to statements of dissent made by SEC Commissioner Peirce, who issued an impassioned assertion towards the decision, stating:
“The Fee’s motion immediately deprives traders of this selection. I reject the function of gatekeeper of innovation—a task very totally different from (and, certainly, inconsistent with) our mission of defending traders, fostering capital formation, and facilitating honest, orderly, and environment friendly markets. Accordingly, I dissent.”
Tom Lee: It Is Optimistic That Bitcoin “Shrugged Off” The ETF Rejection
Whereas the aforementioned rationale is fundamentally-based, Tom Lee, the Head of Analysis at Fundstrat World Advisors, identified that technicals might have performed a task within the reversal. In a tweet, Lee wrote:
“It’s an indication of a optimistic change in crypto that
#BTC has primarily shrugged off the #Winklevoss ETF rejection. If this passed off in April-June (extra bearish interval), the crypto market would have seen a large sell-off. In brief, affirming why technicals bettering.”
Lee additionally famous that his agency’s so-called “Bitcoin Misery Index,” which makes use of a wide range of indicators to measure market sentiment, is out of the “distress” zone at 39.
It’s at 39. So it’s been recovering and def out of distress zone (under 27).
— Thomas Lee (@fundstrat) July 28, 2018
Earlier this yr, the Fundstrat analyst famous that the index hit a near-seven-year low at 18.8, which he noticed as a bullish sign. Talking extra on what these seemingly unapplicable numbers imply, he famous:
“The final 4 instances this was under 27…there was not a single occasion with bitcoin not up 12 months later,”
As indicated by the assertion above, and appearances on CNBC Fast Money, the optimistic development seen with this indicator may recommend that Bitcoin will solely proceed to maneuver upwards within the medium to long-term.
“Robust Restoration Confirms The Bull Market”
Following the quick market response to the information, Parabolic Trav, a long-time technical analyst and cryptocurrency proponent, delivered a Tweet regarding his ideas on the state of the market. Whereas the assertion might not seem like a lot, it delivers a punch straight to the hearts of the Bitcoin bears. Conserving it quick and candy, Trav wrote:
“Robust restoration right here confirms the bull market.”
Robust restoration right here confirms the bull market. $BTC
— Parabolic Trav (@parabolictrav) July 26, 2018
As aided by the market’s most up-to-date quantity figures, which at present whole to $20 billion up to now 24 hours, the reversal may very well be labeled as a “robust restoration” by many analysts. Moreover, Bitcoin recovered in a shorter period of time then it took to maneuver down, indicating that this was no “half-assed” restoration.
The market nonetheless is eagerly awaiting the upcoming choice on the VanEck and Cboe-backed ETF, with many seeing the destiny of the decision as nonetheless up within the air.
Featured Picture from