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Bitcoin produces downside wicks after $65K rejection, SEC opens comment period on spot BTC ETFs options

  • Bitcoin price rejection from $65,000 resistance continues after failure to reclaim it as support.
  • Liquidity pool below $60,000 continues to act as magnet for BTC toward proper market balance.
  • US SEC has delayed decision and opened comment period on whether or not to allow options trading on spot BTC ETFs.

Bitcoin (BTC) price continues to fall, with the reverbarations of this weakness affecting the market. The dump has been invigorated by reports that the US financial regulator has delayed a decision on spot BTC ETF options trading, opening the floor for comments. 

Also Read: Bitcoin price downside momentum grows, BTC bulls wait to buy BTC under $63K level

Daily digest market movers: SEC opens comment period on spot Bitcoin ETFs options

The US Securities & Exchange Commission (SEC) has delayed a decision on whether or not to allow options trading on spot BC ETFs. It basically means that they need more time to review and analyze the proposal. The SEC may have concerns about potential risks, market manipulation or other regulatory issues associated with introducing options trading on these ETFs.

Delays in such decisions are common as the financial regulator works to ensure investor protection and market integrity. Alongside the delay, it has opened a comment period but in the meantime markets will be keen to wait for further updates from the SEC or the relevant parties involved in the proposal to understand the reasoning behind the delay and any potential implications for investors.

Meanwhile, data according to on-chain market intelligence firm Glassnode shows the Bitcoin network hash rate is still rising, which points to ongoing investments in mining infrastructure. A strong mining hash rate is crucial for Bitcoin’s security, making network attacks more challenging.

BTC hashrate growth

Technical analysis: Bitcoin price drawn to liquidity pool below $60,600

From a technical standpoint, Bitcoin price continues to get rejected from the $65,600 resistance level. It comes after multiple failed attempts to reclaim above it and flip the level into support.

Accordingly, the pioneer cryptocurrency has been producing downside wicks, drawn toward the pool of liquidity that exists between the $60,600 and $60,000 psychological level.  

As this has happened for multiple weeks now, enhanced profit booking could see Bitcoin price dip into the said liquidity pool. This will happen if the Relative Strength Index (RSI) continues to record lower highs, effectively pulling toward the 50 mean level. The Moving Average Convergence Divergence (MACD) is also hinting at a downtrend, pending confirmation when it will cross below the orange band of its signal line. If it does, it would signify a potential change in the direction of BTC price movement.

This would mean that the short-term momentum is shifting to the downside and that a potential downtrend may be forming. Traders are likely to sell or take a bearish position on BTC when this happens, which would enhance the downtrend.

In a dire case, Bitcoin price could slip below the liquidity pool under the $60,000 psychological level, with the next line of support presented by the 50-day Moving Average (MA) at $54,689. A deviation of this lagging indicator to the downside would signal an extended fall.

BTC/USDT 1-week chart

Conversely, if the bulls leverage the ongoing correction as a buy the dip opportunity, Bitcoin price could recover. Key levels to watch in a northbound directional bias would be the $65,596, $69,032, and $71,311 levels. A candlestick close above here would pave the way for BTC to reclaim its peak price of $73,777, which would lay the groundwork for a new all-time high above it.

Cryptocurrency metrics FAQs

The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.

Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.

Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.

Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.

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