Bitcoin (BTC) has undergone a price correction, falling below the $26,000 level on the heels of the U.S. Securities and Exchange Commission’s (SEC) delay in deciding whether to approve applications for spot Bitcoin ETFs.
BREAKING: 🇺🇸 SEC delays decision on WisdomTree, Valkyrie, and Invesco’s spot #Bitcoin ETF applications. pic.twitter.com/oJg4xdjThx
— Bitcoin Magazine (@BitcoinMagazine) August 31, 2023
The correction came following mid-week gains driven by positive regulatory news, which caused BTC to experience a remarkable 8% surge, hitting over $28,000 on Aug. 29. However, the coin failed to break through the significant resistance point of $30,000.
SEC delay cools down the market
The initial increase followed a federal appeals court’s decision directing the SEC to rethink its denial of Grayscale Investments’ request to convert its GBTC into an Exchange-Traded Fund (ETF).
Aligning with recent trends, Bitcoin quickly gave back a significant portion of these gains, with crypto advocates arguing that the approval of a Bitcoin spot ETF could act as a massive price catalyst for the coin.
At the time of writing, Bitcoin was trading at $25,840, per CoinGecko, showing a minor 0.5% increase over the past 24 hours.
You might also like: Former SEC chair Jay Clayton predicts inevitable approval of Bitcoin ETF
BTC price chart | Source: CoinGecko
Over the course of last week, Bitcoin’s movements have been relatively stable, with a decline of about 1.1%.
Bitcoin fake pump?
However, the fluctuation experienced in the last few days has led to some speculation about the future of Bitcoin. A crypto analyst known as Tolberti shared his insights on TradingView on Sept. 3, suggesting that the sudden surge and subsequent drop in Bitcoin’s value could potentially be a “bull trap” or “fake pump.”
He noted a significant head and shoulders pattern in the current Bitcoin chart, typically indicative of bearish trends.
BTC/USDT chart | Source Tolberti via TradingView
Tolberti saw this trend shift as a chance for traders to go short on Bitcoin, identifying key price levels as potential entry points. However, he warned that Bitcoin did not seem ready for a full-blown bull market, backing his bearish stance with several indicators.
One such indicator was Bitcoin trading below its 200-week moving average (M.A.), traditionally a sign of extended bearish sentiment. He speculated that Bitcoin could drop to $10,000, possibly reversing as early as March 2024.
He also acknowledged that Bitcoin displayed an impulse wave after a significant market crash — usually a bearish signal. A bullish correction might come before another considerable downturn, adding another layer of unpredictability to Bitcoin’s future price movement, he explained.
Read more: Grayscale defeats SEC, ETF drama takes spotlight, Ronaldinho embroiled in crypto scam | Weekly Recap