Despite the crypto industry achieving a major victory in terms of regulation, Bitcoin is likely to end August on a low note. Market participants predict that the cryptocurrency may spend September stuck in a range. According to the report, this month’s cryptocurrency price fall is expected to be 10%. Following a federal appeals court’s recent decision to support Grayscale over the Securities and Exchange Commission in a crucial crypto ETF issue, Bitcoin just experienced a 7% increase. That didn’t, however, get the leading cryptocurrency back up to the $29,000 mark.
Thin trade volumes and liquidity are causing investors difficulty. Bitcoin prices may remain rangebound throughout September despite the fact that cryptocurrency investors have a lot to be happy about. Rob Ginsberg, an analyst at Wolfe Research, wrote in a note on Wednesday that if bitcoin can show some follow-through, the price should retest resistance above 29.5-30k in the coming weeks.
In the end, we expect it will break through that level and start a fresh leg higher, but if it fails to do so, we will probably be talking about the critical $25,000 support level once more. These drawdowns so far have been prevented by quick legs higher, which were primarily fueled by catalysts, the analyst claimed. With Grayscale’s decision in favor of the bitcoin spot ETF on Tuesday, we witnessed the most recent one. Our long-term optimistic outlook is also supported by the possibility that this may allow major institutions to become more involved.
According to Will Tamplin of Fairlead Strategies, increases in the company’s short-term metrics are what cause the initial increase. Additionally, it advises “follow-through in the upcoming days within the context of bitcoin’s trading range.” Similar to its downtrends in May and June, bitcoin may experience another consolidation over the medium term.
According to Tamplin, $28,800 will be the next important threshold to test. The next level to watch would be $31,900. Since the banking crisis sparked a surge in March, Bitcoin has been ranging between $25,000 and $30,000, with sporadic spikes beyond $30,000 that haven’t been able to hold. The market is still being held back by the general lack of regulatory clarity, even while particular regulatory initiatives have acted as small steps forward. Also, keep in mind that historically, September has been a volatile and negative month for the equity markets, and crypto has mostly followed that pattern, according to Elliot Han of Cantor Fitzgerald.
Han pointed out that bitcoin’s biggest loss occurred in September, just before the 2020 halving. Bitcoin’s halving halves the incentive for mining the cryptocurrency, and it’s set to happen again in spring 2024. Any favorable news on US regulation will be welcomed, but none is expected except from ETF applications,” he noted. This is not to say that we cannot be shocked on the positive or negative side. All eyes are on Washington. September begins with an expected update from the SEC on at least one spot bitcoin ETF application. The SEC is anticipated to respond to submissions from Bitwise, BlackRock, Fidelity, VanEck, and others as early as September. On Thursday afternoon, the SEC postponed its decision on WisdomTree and Invesco’s bitcoin ETF applications.
According to Kristin Smith, CEO of the policy-focused Blockchain Association, the regulatory environment is crucial for this next stage because the institutions who are looking at this want to see more regulation than what is already in place. They fear that if they rush in too quickly without the proper foundation in place, it will ultimately come back to bite them.
She continued, This kind of legislative progress has really caught the attention of traditional finance institutions. It’s possible that they had been considering this before but had put it on the backburner, but now they are being forced to want to be in place when legislation ultimately becomes law.
