Bitcoin (BTC) has been making moon shots on expectations that the US Securities Exchange Commission (SEC) will approve ProShares BTC futures exchange-traded fund (ETH). With the regulator giving the company the go-ahead to launch the ETF today, analysts are conflicted on whether the flagship cryptocurrency will continue trending higher or crash once again.
Some analysts are going with a Wall Street saying that goes, buy the rumor, sell the news. According to them, traders tend to buy an asset when expecting positive news then sell it after confirming the news, thus driving the asset’s price lower.
An example is Dan Morehead, Pantera Capital’s CEO and co-Chief Investment Officer, who recently said,
“Will someone please remind the day before the bitcoin ETF officially launches? I might want to take some chips off the table.”
BTC’s history with major events
Morehead referenced the Wall Street adage, noting that it works in the crypto-verse as well. To back his claim, he pointed out how the BTC market surged 2440% on news that the Chicago Mercantile Exchange (CME) would list BTC futures. However, when CME listed BTC futures, the market crashed, losing 83% of its value.
Another perfect example, according to Morehead, is the 822% gain in the BTC market after news of Coinbase’s going public. BTC soared to set its current all-time high (ATH) of $64,863 on April 14, the same day the Coinbase went public, before a bear market took over, sending BTC crashing again.
Nick Mancini, a research analyst at Trade The Chain, echoed Morehead’s sentiments, saying that once the trading of a BTC futures ETF commences, the BTC market will experience massive selling pressure.
He cautioned BTC adopters, noting that,
“The reason you keep crypto on exchanges is because you plan to make use of that liquidity. Keep a lookout for a major selling event this week.”
BTC’s pullback might not be as significant this time around
According to Noelle Acheson, the Head of Market Insights ad Genesis Global Trading, a weak uptake of ProShares BTC futures ETF might trigger a correction. Like Morehead and Mancini, Acheson based her analysis on how BTC faired after BTC futures listing on CME and Coinbase going public. However, she believes this time might be different.
Per Acheson, a sell-off spurred by the poor adoption of ProShares BTC futures ETF would not be as significant as the CME and Coinbase ones. She also believes that the bear market will not last as long. Acheson further noted that the current market cycle is solid, unlike in the previous cases where it was frothy and showing signs of exhaustion.
Stack Funds’ COO and co-founder, Matthew Dibb, also believes that there won’t be a massive pullback. According to him, BTC funding rates are flat, meaning there is little leverage in the market. He further noted that the market does not show any signs of overheating in the short term.
Meanwhile, BTC has gained 2.22% in 24 hours and 8.49% over the past seven days to change hands at $62,200.19.