A Bitcoin (BTC) price correction down to $22,000 is becoming increasingly likely, as BTC derivatives have begun to exhibit bearish tendencies.
The price chart of Bitcoin leaves little doubt that investor sentiment has worsened since Grayscale’s much-hyped legal victory against the United States Securities and Exchange Commission on Aug. 29 and the SEC’s subsequent postponement of multiple spot BTC exchange-traded fund (ETF) requests.
The central question remains whether the prospects of an ETF can outweigh the growing risks.
Spot Bitcoin ETF hype is fading
By Aug. 18, the entire 19% rally that occurred following BlackRock’s ETF initial filing had fully retracted as Bitcoin moved back to $26,000
Next, there was a failed attempt to reclaim the $28,000 support as investors raised the odds of an ETF approval following the positive news regarding Grayscale’s Bitcoin trust request.
Bitcoin/USD price index, 1-day. Source: TradingView
Cryptocurrency investors’ morale deteriorated as the S&P 500 index closed at 4,515 on Sept. 1, merely 6.3% below its all-time high from January 2022. Even gold, which hasn’t been able to break above the $2,000 level since mid-May, is 6.5% away from its all-time high. Consequently, the general feeling for Bitcoin investors just seven months ahead of its halving in 2024 is certainly less positive than expected.
Some analysts pin Bitcoin’s lackluster performance on the ongoing regulatory actions against the two leading exchanges, Binance and Coinbase. Moreover, multiple sources claim that the U.S. Department of Justice (DOJ) is likely to indict Binance in a criminal probe. The claims are based on allegations of money laundering and potential violations of sanctions involving Russian entities.
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North Node Capital chief investment officer and Bitcoin supporter Pentoshi expressed the current conditions in a post on X (formerly known as Twitter):
I think we still will eventually get some bearish Binance news vs DoJ. That should be seen as opportunity!
But overall. We also likely get ETF’s…