The price of Bitcoin has steadily reversed back to $1,180 in the eve of the US SEC’s (Securities and Exchange Commission) decision whether to approve what is to be the world’s first Bitcoin ETF or not. Coincidentally, at the same time there are updates coming from China’s PBOC’s about the future course of regulatory practices, which combined, make this week one of the toughest weeks for Bitcoin.
The director of the Administration Unit at China’s People’s Bank (PBOC), Zhou Xuedong, has reportedly shed new light about BTC regulation. Earlier this week, Xuedong said that the PBOC would, for now, have a “forgiving attitude” towards Chinese exchanges, and adopt a period of observation after which any exchange who continues to infringe their policies will be blacklisted.
The infringements include specific practices tied to Bitcoin like offering margin and leverage trading, breaking anti-money laundering laws, tax evasion, inflating trading volumes by charging no fees, and allowing users to change back Bitcoin to fiat money for buying goods.
Market Remains Pro-Sell
During the past two days since our last update, the price of Bitcoin has slowly set on a downward course, which was often interrupted by bursts of volatility. The biggest drop was observed yesterday, when the price touched $1,158.36, while the highest point was hit several hours later, when Bitcoins briefly traded at $1,199.88.
As we talked about on Wednesday, there was a surge in trading volume that was likely prompted up by concerns over the big events this week, which has now slightly subsided to $192,380,000, while the market cap is similar to two days ago, or $19.1 billion. But stay watchful during the next days, as high volume is likely to re-appear.
Our technical analysis shows that the market is predominantly pro-sell on a long time-frame, with 5 out of 12 oscillators and 7 out of 12 moving averages being in the sell zone. The SMA 100 is safely above the SMA 200 on this time-frame, so all is not lost, as there is less resistance to the upside.
On the other hand, short-term indicators show some buyer pressure forming, which if it continues, could keep the price afloat. However, don’t expect the price to spike quick, as the market is still bearish. Also, remember that in times of such big events, the price is likely to get highly volatile and unpredictable.
Will the Winklevoss ETF Approval Change Bitcoin?
The top story this week is the pending approval by the SEC of the Winklevoss ETF (Exchange Traded Fund) which, if approved, would allow people to buy and trade Bitcoins just like regular stock. The Bitcoin Trust ETF was conceived by tech entrepreneurs and Bitcoin enthusiasts Cameron and Tyler Winklevoss and is expected to draw in more capital to the BTC market and attract traditional investors.
The final ruling that could make or break the three year project has to come by March 11 (this Saturday), but it is expected anytime before it, even today. To open up the doors for the ETF, the SEC have to approve the change of rules in the BATS stock exchange, which some believe to have slim odds of happening but Bitcoin supporters remain optimistic.
If approved, the ETF is expected to bring new liquidity to the market by allowing investment funds to finally jump in on the Bitcoin bandwagon, as the cryptocurrency will be then considered to meet regulatory standards. This is expected to bring in high volumes of money to the Bitcoin market and subsequently lend stability to the currency but also increase its value.