Bitcoin price upside likely capped, lawyers state SEC is unlikely to kill ETF applications

●Bitcoin price rally was capped below $48,000 following the false SEC ETF announcement.

●Securities lawyers told Fox Business that it would be unprecedented that the SEC kills the ETF applications at the current stage of the process. 

●Crypto experts note that Bitcoin holders engaged in “sell the news” or hedging behavior in response to the false ETF approval.

Bitcoin price is likely to see a capped upside since BTC price nearly missed the $48,000 level in response to the false announcement of Spot Bitcoin ETF approval. The US financial regulator Securities and Exchange Commission (SEC) revealed that the X account was hacked. 

Securities lawyers told Fox Business that an approval is likely since the regulator may not kill ETF applications after they have reached the current state, post filings and amendments. 

Bitcoin Spot ETF’s false approval announcement triggered “sell the news” 

●Chris Burniske, co-founder of a venture firm focused on crypto assets notes that Bitcoin traders engaged in “sell the news” or what is considered hedging behavior in response to the SEC’s false announcement of Spot Bitcoin ETF approval. 

●The SEC’s twitter account was hacked and a false announcement was released, despite the approval news, BTC upside was capped below $48,000. Burniske tweeted about the development on X.

●Experts at Castillo Trading recommend no new “long positions” in Bitcoin prior to the SEC’s decision on Spot ETF applications in a recent tweet. 

●Experts believe that the Spot Bitcoin ETF approval could be a non-event for BTC while rest of the crypto ecosystem, altcoins yield gains. 

●According to CryptoQuant data, Bitcoin whales are de-risking and avoiding sending their BTC holdings to derivatives exchanges. The risk-off behavior of whales indicates that large wallet investors are waiting on the sidelines for the SEC’s decision on the January 10 deadline. 

Bitcoin: Inter-exchange Flow. Source: CryptoQuant

Technical Analysis: Bitcoin price likely to correct to $42,000, gains capped at $49,400

Bitcoin price gains are likely capped at the 61.8% Fibonacci Retracement level, $49,401, of the decline from the Nov ‘21 peak of $69,158 to the Nov ‘22 low of $15,541. BTC price is currently above its three long-term Exponential Moving Averages (EMAs) , 10, 50 and 200-day at $44,842, $41,819 and $34,478. 

BTC/USDT 1-day chart, Source: TradingView.

Further, Bitcoin price has established key support at $42,000 where 2.48 million addresses hold over 1.12 million BTC, according to IntoTheBlock data. 

In/ Out of the Money in Bitcoin. Source: IntoTheBlock

If Bitcoin price breaks past the $48,000 resistance, with no major resistances at play, BTC could rally to $53,728.