FinTelegram issues an urgent investor warning for the crypto market: Beware of rumors and market speculation! The crypto market has experienced a significant drop in prices within a few minutes, erasing gains spurred by rumors about the imminent approval of crypto ETFs by the U.S. Securities and Exchange Commission (SEC). The recent price plunge from nearly $46,000 to $40,000 has been fueled by additional rumors suggesting the SEC’s likely rejection of all crypto ETF applications in January.
The overheated crypto market is currently characterized by FUD (Fear, Uncertainty, Doubt) attacks. Social media are the ideal platforms for this. Investors should currently withdraw and watch. Day traders, on the other hand, currently have a great opportunity to make profits (or losses).
It is essential to acknowledge that after the recent surge in crypto prices, a corrective downturn is a natural expectation. Current market conditions appear overheated, driven by high expectations surrounding crypto ETFs and potential market manipulations by large-scale traders or ‘whales.’
Matrixport analyst Markus Thielen predicts that the SEC is poised to reject all bitcoin spot ETF proposals this month, citing the applications’ failure to meet a critical regulatory requirement. Despite ongoing discussions and updated proposals between the SEC and ETF applicants, Thielen’s report stresses that key compliance issues remain unresolved. He points to the political dynamics and SEC Chair Gensler’s stance on stringent compliance in the crypto industry as primary factors influencing this outcome.
Gary Gensler, SEC Chair, has expressed concerns about widespread non-compliance and fraudulent activities within the crypto sector, emphasizing the need for more robust regulatory measures to protect the public from malpractices.
Should the SEC reject the bitcoin spot ETF applications, Thielen anticipates a significant market impact. He forecasts potential cascading liquidations and a sharp decline in Bitcoin’s price, possibly around 20%, falling back into the $36,000 to $38,000 range. This scenario could unfold if billions of dollars in long bitcoin futures are unwound following the rejection.
Currently, Bitcoin is trading around $44,562, marking a significant milestone on the 15th anniversary of its genesis block. Despite recent increases in value, the potential SEC denial could introduce short-term volatility in the market.
Looking ahead, Thielen maintains a bullish outlook for 2024. Based on historical patterns of U.S. election years and Bitcoin mining cycles, Matrixport predicts that Bitcoin’s value will surpass its initial $42,000 mark by year-end, offering a glimmer of hope for long-term investors amidst these regulatory challenges.
Investors are advised to exercise caution and avoid making hasty decisions based on market rumors. Staying informed and vigilant is crucial in navigating the unpredictable and often speculative cryptocurrency market.
