Bitcoin has had a big week this past week. With the new all-time highs and the VanEck Spot ETF rejection, it is interesting to see how the market has reacted to these. VanEck had filed its ETF with the SEC and on Friday, it got back the dreaded rejection. The reason given for the rejection was that there wasn’t adequate confidence that investors would be protected when investing in the fund.
After the rejection, the market was expected to react negatively. However, to much surprise, bitcoin had simply brushed this off and continued on its merry way. It speaks volumes to the resilience of the digital asset in times like this when a major ETF rejection failed to tank the price. Much has happened since VanEck received the rejection.
VanEck Moves Forward
After getting the rejection for the Spot Bitcoin ETF, VanEck had subsequently gotten approval for its futures ETF. The fund had begun trading on Tuesday on the CBOE to much anticipation. But trading in the fund was not too impressive compared to the ProShares ETF trading which had begun in October. Nevertheless, VanEck has moved forward from the rejection and so has the market.
Market shakes off VanEck rejection | Source: Arcane Research
Other funds are still filing for a Spot Bitcoin ETF though. One of those is Grayscale which is planning on turning its bitcoin fund into a spot ETF. The VanEck rejection has shown other funds that they need to do more due diligence, meaning that there is more comprehensive research being done to back the claims in spot ETFs from other asset managers like Fidelity and Bitwise.
The market did not exactly react the way investors were anticipating. Bitcoin did not decline following the news on Friday. Instead continue to mark recovery trends in the same time period.
BTC price begins recovery | Source: BTCUSD on TradingView.com
Bitcoin Moves Into Consolidation
Since the rejection, bitcoin has since fallen back into its consolidation range. After hitting a new all-time of $69K, the digital asset had fallen back into the low $60,000s, with support at $60K. The next closest resistance was placed at $67,000 but the asset would not have a chance to test this resistance as it had fallen below $60,000 in the early hours of Wednesday.
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With the fall below $60K, the next support level is at $58,000. However, BTC has been known to break through multiple support levels in one go, so it is important to have this in mind when making decisions going forward.
Since BTC seems to have reached a critical price point, it is no surprise that the market is experiencing some downtrend. Traders will sell some of their holdings to realize gains and this will translate to struggling prices for a while. However, the asset still looks relatively strong on the charts, suggesting that recovery from the dip is not too far off.
Featured image from Investopedia, chart from TradingView.com