Bitcoin (BTC) seems to be on track to make a recovery following the marketwide selloff that took place over the past week. Technical indicators suggested that the leading cryptocurrency in terms of market capitalization may attempt to flip a key resistance level into support during the upcoming week.
In related news, the anticipation of a Spot Bitcoin Exchange Traded Fund getting approved seems to be dwindling. This is according to a SEC insider who predicted that the current applications will be rejected. The main reason for his skepticism is the high levels of regulatory uncertainty surrounding the cryptocurrency space. In addition to this, the SEC representative believes that the cryptocurrency realm is plagued with a high degree of manipulation driven primarily from bots.
BTC Price Overview
CoinMarketCap indicated that BTC was changing hands back above $26K at $26,178.75 at press time. This was after the leading cryptocurrency was able to achieve a gain of 1.08% during the past day of trading. The leading cryptocurrency’s weekly performance remained in the red zone, however, despite the positive daily performance. Subsequently, BTC was down more than 10% for the week.
Daily chart for BTC/USDT (Source: TradingView)
BTC’s price printed consecutive higher lows over the past 3 days and may be on track to continue this trend in today’s trading session. Traders will want to take note of the fact that the leading cryptocurrency’s price was trading below the lower level of the Bollinger Bands (BBANDS) technical indicator at press time. Therefore, BTC’s price may continue its gradual trend of recording higher lows as it attempts to reclaim a position within the range of the BBANDS indicator on its daily chart.
This bullish thesis will be invalidated if BTC’s price drops below $25,801.09 before the end of today’s trading session. In this scenario, the cryptocurrency may be at risk of falling to the crucial support level at $24,200 through the course of this coming week.
However, if BTC’s price stays on its current positive trajectory, then it could look to flip the $26,915 resistance into support within the next 72 hours. A daily close above this key threshold will open up the possibility for BTC to rise to the next significant price point at $28,295.38. The only obstacle that will stand in the cryptocurrency’s way in its pursuit to this level is the 9-day Exponential Moving Average (EMA) line at around $27,448.45.
This resistance level is also in the middle range of the aforementioned BBANDS indicator, which means that BTC’s price may face rejection from the major mark. This could cause it to pull back to the 9 EMA line on the daily chart. As long as BTC’s price does not close a daily candle below the technical indicator in the 48 hours that follow, then the cryptocurrency’s price may continue ascending, potentially reaching the psychological $30K resistance level.
BTC ETF Approval Chances Are Slim
In the ever-evolving landscape of cryptocurrency, the anticipation for a spot Bitcoin Exchange Traded Fund (ETF) approval by the U.S. Securities and Exchange Commission (SEC) has reached a crescendo in recent weeks. However, a former SEC insider, John Reed Stark, has cast a shadow of doubt on the viability of such an approval, citing concerns about market manipulation, ethics, and regulatory oversight.
Stark's sobering assessment, shared via his X account on 18 August 2023, suggests that the chances of the SEC approving a Bitcoin ETF are "slim and none." At the core of his skepticism lies the emerging evidence that the cryptocurrency market may be rigged, a notion supported by a recent study by the Network Contagion Research Institute and a CNBC report. These studies have shed light on the extensive manipulation techniques employed in the market, the lack of ethical standards, and the prevailing regulatory uncertainty.
In characterizing the cryptocurrency market, Stark uses a vivid metaphor, terming it a "Walking Dead-Like, Anarchical Financial Marketplace." This description aptly encapsulates the chaotic and unpredictable nature of the cryptocurrency realm, where traditional rules and safeguards seem to be conspicuously absent.
One of the primary concerns highlighted by Stark is the absence of regulatory oversight, consumer protections, and financial safeguards in the cryptocurrency industry. He emphasizes the lack of traditional indicators such as fundamentals and balance sheets, which are crucial for informed decision-making in more established markets. This dearth of reliable metrics and oversight has allowed bots to wield significant influence in boosting cryptocurrency prices, especially those tied to FTX-listed digital assets, as revealed in the CNBC report. This manipulation not only undermines market authenticity but also raises questions about the potential exploitation of unsuspecting investors.
Stark's critique extends beyond market manipulation to the ethical implications of the cryptocurrency boom. He accuses the industry of not only tolerating fraud but actively propagating it. This is a sobering reminder of the moral quandaries that can arise when financial markets operate in the absence of clear regulations and ethical guidelines.
Furthermore, Stark draws attention to the plight of victims who unwittingly become participants in fraudulent schemes, often unknowingly promoting fraudulent activities through social media. This phenomenon highlights the ease with which misinformation and fraudulent practices can spread within the cryptocurrency ecosystem.
As the cryptocurrency market evolves, Stark's insights underscore the urgent need for regulatory clarity and investor protection. His cautionary stance challenges the prevailing "Greater Fool Theory" adherents who engage in rampant speculation without considering the regulatory gaps and potential consequences. The absence of proper oversight could lead to financial crises and substantial losses for investors.
The SEC's recent decision to defer approval of the spot Bitcoin ETF, once again, accentuates the regulatory uncertainty that continues to shroud the cryptocurrency market. While market analysts believe that an ETF approval could trigger a market upswing and aid in recovery from recent sell-offs, Stark's cautionary perspective serves as a reminder that the market's health and stability require more than just positive news. A robust regulatory framework and ethical guidelines are essential to safeguard the interests of investors and promote the long-term sustainability of the cryptocurrency sector.
Disclaimer: Coinpaper does not recommend that any cryptocurrency should be bought, sold, or held by you. Always conduct your own research and consult your financial advisor before investing in any digital asset.
