Bitcoin price dips 7% as SEC delays seven spot BTC ETF applications

• The US SEC has delayed yet another series of spot BTC ETF applications, after Grayscale and Cathie Wood’s Ark Invest.
• BlackRock, Valkyrie, Fidelity, Bitwise, VanEck, WisdomTree, and Invesco have all received delay orders.
• Bitcoin price has reacted to the news with a 5% drop back to the $26,000 range.
• Meanwhile, Bitwise withdrew one of its ETH Futures applications.

Bitcoin (BTC) price has whiplashed all the ground covered during the August 29 rally when Grayscale asset manager’s news catalyzed an impulse to drive the market north. In the latest development, the market value of the giant crypto has dipped and the US Securities and Exchange Commission (SEC) takes blame.

Bitcoin price dips with spot BTC ETF delays

Bitcoin (BTC) price is down almost 7% in the last 24 hours, trading at the current price of $26,022. The dip comes after the US SEC delayed another series of deadlines for spot Bitcoin ETF filings.

BTC/USDT 1-day chart

The delay comes as investors and market observers anticipated a decision for spot BTC ETF applications on September 1. However, unsurprisingly, the financial regulator released delay orders for WisdomTree, Invesco, and Valkyrie. Other delay orders that have come in include Fidelity, VanEck, Bitwise, and BlackRock.  

The delays mean that the SEC prefers to stack up the decisions for the next 45 day deadline, with the markets’ eyes now peeled for around October 15, with the likelihood of all 7 applicants getting a decision together. It is worth mentioning that this would be around the deadline for the SEC to respond to the Grayscale decision as regards whether to appeal or not. A paragraph in the previous announcement reads:

Still, the SEC has 45 days to appeal the ruling – in which case it would either go to the Supreme Court or an en banc panel review – or could still reject the application on other grounds.

Meanwhile, Bitwise has decided to pull back one of its Ethereum futures applications, in a move that according to experts, would enable them to convert their BITC product (a Bitcoin-linked ETF designed for long-term investors) to hold ETH futures as well as the BTC futures.

UPDATE: @BitwiseInvest withdrew one of their Eth Futures applications. This makes sense to me bc they'll be able to convert $BITC to hold ETH Futures alongside BTC futures ~8 days before this ETF would've launched. It'd make little sense to have both https://t.co/umGSkIB7Wt

— James Seyffart (@JSeyff) August 31, 2023

Citing an excerpt in the withdrawal order:

The trust no longer intends to seek effectiveness of the fund and no securities of the fund were sold or will be sold..

Possible implication for Bitcoin price

After the drop Bitcoin price could find support at $25,036, providing the inflection point for the next uptrend. However, if this level fails to hold, BTC could move lower to the psychological $24,000. The Relative Strength Index is trying to repel the downside, evidence of bulls coming in. Similarly, the histogram bars of the Awesome Oscillator are edging toward the midline while flashing green, bolstering the case for the bulls. 

BTC positions liquidated in the 7% slump

It is worth mentioning that the 7% dip liquidated $41.66 million long positions after their stop losses were triggered. On the other hand, only $7.31 million short positions were liquidated. 

BTC liquidations

When an asset’s price drops, the leveraged positions of traders are forced to close because the margin is not enough to cover the loss. The exchange is therefore compelled to close the position automatically if the trader is unable to meet the margin call.

Source

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