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No Bitcoin ETF In Sight Despite Strong Institutional Demand — A Bearish Alert?

bitcoin, No Bitcoin ETF In Sight Despite Strong Institutional Demand — A Bearish Alert?
Image by Hier und jetzt endet leider meine Reise auf Pixabay aber from Pixabay

Jaipur (CoinChapter.com) — Bitcoin ETF approvals have long been a bone of contention. Especially with the US Securities and Exchange Commission (SEC). Now, it seems that the struggle to get a BTC ETF out will carry on further. Despite fervent enthusiasm from the institutional herd. Does it mean another bearish drawdown for the top cryptocurrency? Let’s examine.

SEC Chair Thinks Bitcoin and Crypto Investors Are At Risk

Recent woes around the approval of Bitcoin ETFs surfaced after SEC chair Gary Gensler expressed concern regarding “investor protection.”

Mr. Gensler in his testimony before the House of Representative’s subcommittee on financial services last week said:

“there are many challenges and gaps for investor protection in [crypto] markets”

Also, without mincing words, the SEC chair didn’t lose any opportunity to fire shots at cryptocurrency exchanges as well.

“none of the exchanges trading crypto tokens has registered yet as an exchange with the SEC”- he said

Mr. Gensler’s thoughts about safeguarding the interests of bitcoin investors are appropriate. Especially after the flagship cryptocurrency’s price experienced a tumultuous fall — to the tune of 50% — last month, and Canada’s first Bitcoin ETF’s value dropped by 41.11%.

But institutional demand hasn’t tempered, and deep-pocketed individuals, funds, and corporations are looking at this dip as an excellent buying opportunity.

Nonetheless, what the SEC Chair might be insinuating is the lack of regulatory clarity. Craig Salm, vice-president of legal at Grayscale, while clarifying Mr. Gensler’s move, said:

“[Gensler] wants to see regulation there, and if that happens, it seems like that would be what the SEC needs to approve a bitcoin ETF.” 

Is This A Bearish Signal?

Bitcoin ETFs, especially the ones filed by VanEck, have been dismissed by the SEC multiple times. But historically, BTC ETF disapprovals have had little to no effect on the momentum of bitcoin markets.

On the contrary, the world’s most valued cryptocurrency is looking to print a comeback rally. That is partly because long-term HODLers are not selling it despite its recent 50%-plus price crash. Their cue to stay exposed to Bitcoin comes from the cryptocurrency’s promise to act as a hedge against rocketing inflation — led by incessant money-printing by central banks across the world.

Although veteran trader Peter L Brandt predicted a fall to the $20,000 level in his recent analysis, TradingShot (TS) hinted that the recent BTC crash was just a mid-bull correction.

The eponymous trader who enjoys significant popularity on charting website TradingView.com compared the bitcoin crash last month with similar drawdowns in 2019 and 2013.

Comparison of the Recent Bitcoin Corrections With the Ones in 2019, 2013, 2017, 2011; Source: TradingShot/TradingView
Comparison of the Recent Bitcoin Corrections With the Ones in 2019, 2013, 2017, 2011; Source: TradingShot/TradingView

As per TS:

The common characteristic of mid-Bull corrections is that the 1D MA200 (orange trend-line) was hit after a 1D MA50/MA100 Bearish Cross got formed.

On the other hand, with the exception of 2013, when Bull Cycles ended, the 1D MA200 was hit before a 1D MA50/MA100 Bearish Cross.

From TradingShot’s charts it is clear that bitcoin has more steam left in it for another rally.

The similarity with 2013’s market conditions was also voiced by the famed BTC S2F model propounder PlanB in his latest tweet:

If PlanB’s indications are anything to go by, we are easily looking at a $100,000+ bitcoin price by year end.

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Himadri Saha

Himadri is an active investor in cryptocurrencies and upcoming blockchain technology projects. He has been a part of the digital asset space since 2017 and has held multiple positions as Social Media Manager, Assistant Editor, Sponsored Content Manager, Cryptocurrency Journalist roles in reputed news outlets like NewsBTC, Bitcoinist and CryptoPotato. He has also helped numerous blockchain projects gain prominence through terse and succinct marketing/technical content. Himadri comes with a marketing and engineering background, and has worked with reputed names such as GE Healthcare, Volvo Trucks and Polycom before moving into crypto.

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