Matrixport Warns: SEC Rejection of Spot ETFs Could Lead to a 20% Price Plunge for Bitcoin, Bulls Cautioned
Article Rewritten:
Key Takeaways:
– Matrixport, a leading crypto finance platform, predicts a 20% drop in Bitcoin’s price if the SEC rejects Bitcoin Spot ETFs by January 5th.
– High investor expectations and potential ETF manipulation by short sellers could influence the SEC’s decision.
– While a denial may initially disappoint, it could ultimately result in a healthier and less volatile market.
In the world of cryptocurrencies, predictions and forecasts hold significant weight. Matrixport, a top-tier crypto finance platform, has recently released a report suggesting that the U.S. Securities and Exchange Commission (SEC) may once again reject the approval of Bitcoin Spot ETFs.
If Matrixport’s analysis proves accurate, we could witness a 20% decrease in Bitcoin’s price, settling at around $36,000 to $38,000.
The SEC’s stance on Bitcoin ETFs challenges the high expectations within the crypto community. Matrixport’s latest report indicates that there is a considerable chance of the SEC denying approval for Bitcoin Spot ETFs. In response to this denial, Matrixport anticipates a significant sell-off, particularly among the $5.1 billion worth of perpetual long Bitcoin futures. This selling pressure could result in a 20% decline in Bitcoin prices, bringing them back to the $36,000 to $38,000 range.
As the January 5, 2024 deadline approaches without positive indications, Matrix on Target offers strategic advice for traders. They recommend hedging long positions with $40,000 strike puts for the end of January or considering short positions in Bitcoin using options.
Furthermore, there are potential risks associated with the approval of ETFs. While many anticipate that a Bitcoin ETF approval would trigger price spikes, Matrixport’s insight sparks a discussion about a potential price correction. Concerns arise regarding the ETF becoming a target for short sellers, which could lead to increased volatility or even transform into a “sell the news event.” If the Bitcoin ETF receives the green light, it could invite heightened regulatory scrutiny, potentially resulting in stricter taxation, enhanced reporting requirements, and possible restrictions on Bitcoin usage, all of which could impact investor sentiment.
Some market analysts draw comparisons to the events of 2017 when the Winklevoss Bitcoin ETF was rejected. They suggest that the market may have already factored in the possibility of ETF approval, and a denial could lead to disappointment.
The crypto community eagerly awaits the SEC’s final decision. Regardless of the outcome, it will undoubtedly have a significant impact on Bitcoin’s trajectory in the days to come.