We’re starting off a fresh week with the price of Bitcoin back over $1,220 after panic struck the trading market from the SEC’s decision not to approve what would have been the first Bitcoin ETF (exchange trade fund). After suffering a sharp drop almost immediately after news of the rejection hit the internet, the price struggled for nearly two days to go back to its previous levels.
According to news reports, the SEC, as expected, decided to reject the proposal to make changes to the BATS exchange rules, simply because the proposal was not in line with a provision in the Exchange Act (6b). The said provision stipulates that a national securities exchange would have to be set up in such a way as to prevent fraudulent and manipulative practices that could harm investors or the general public.
Judging from previous records, the SEC believes that since BTC’s major markets remain unregulated, the Winklevoss ETF would not be able to enter a “surveillance-sharing agreement” like what other approved commodity ETP (exchange traded products) trusts have set up. Thus, the proposed rule change would not ensure the protection of users from the said problems and thus wouldn’t be consistent with the Exchange Act itself.
A Split Market
Just like we talked about in our last update, the price of Bitcoin expectedly suffered a sharp swing as the inevitable panic struck the market. The worst change was on Saturday when the price immediately went down to $1087.23 after the news broke out, only to start recovering soon afterwards and gradually come back to the current $1,220 levels.
Naturally, the trading volume was also high during the weekend, with even today’s charts showing a double-than-usual amount of trading. As of now, the trading volume is at $286,427,000, while the market cap sits at $19.76 billion, i.e. there’s enough force to push the price faster either way.
Our technical analysis shows that the long-term trends are pro-buy, with only 2 out of 12 oscillators and 2 out of 12 moving averages sending a selling signal. The gap between the SMA 100 and SMA 200 on this frame is wide, so there is less resistance to the upside. However, short-term signals also show that sellers have overtaken the market, suggesting another price correction if the trends continue.
For now, the price seems headed for a move out of the $1,220 range with $1,200 being the bottom support line. But if it breaks below this line, we might see a further drop.
Bitcoin Unlimited Rises
In other interesting news, the blockchain software upgrade known simply as Bitcoin Unlimited is finally gaining momentum thanks to the price growth and surge in popularity we’ve seen over the previous weeks. Thus far, there have been plenty of talk about upgrading the blockchain to remove the data cap that was set up by Bitcoin’s original developers, but none as decisive as these recent news.
The reported problem with Bitcoin’s blockchain is that that it has become more backlogged than it ever was due to the high number of transactions, leading to high verification fees for faster confirmations. Thus, the Bitcoin Unlimited project is set out to fix this problem by removing the cap.
The project is backed up by high-profile mining pools Antpool and Roger Ver (or Bitcoin Jesus) for starters, and could potentially lead to two separate outcomes, if it gathers enough support to kick off. According to analysts, if it succeeds it would lower the congestion, but if it fails, it could lead to an eventual split of Bitcoin into two separate currencies.