Bitcoin Price Enters Bear Market in Wake of SEC Decision

Bitcoin’s price plunged to more than three-week lows Wednesday following a decision by U.S. securities regulators to delay their ruling on a highly anticipated bitcoin ETF.

BTC/USD Price Levels

The bitcoin price bottomed at $6,360.50 on BItfinex, its lowest since June 15. It would later recover around $6,460, where it was down 9.5% compared with 24 hours ago.

Bitcoin’s market cap shed $10 billion amid the selloff, which began at 17:19 UTC on Tuesday. The cryptocurrency is approaching oversold levels on the RSI, which could provide short-term reprieve.

Twenty-four hours ago, bitcoin looked poised to re-test the 100-day moving average following the successful defense of the 50-day MA. The latest breakdown puts bitcoin in bear market territory, which is described as a reversal of 20% or more from the recent high. What’s more, the leading digital currency has shed more than two-thirds of last month’s rally, which many believed was the start of a more prolonged bull cycle.

The selloff was accompanied by a sharp rise in exchange turnover as traders rushed to liquidate their BTC holdings. Bitcoin’s trade volume across all virtual exchanges topped $5 billion on Wednesday for the first time in a week.

Despite the decline, bitcoin’s share of the total cryptocurrency market rose to 48.7%, according to CoinMarketCap. That’s the highest since December.

SEC Delays Ruling on Bitcoin ETF

Bitcoin’s sudden reversal came after the U.S. Securities and Exchange Commission (SEC) postponed its decision on a proposed bitcoin ETF filed jointly by VanEck and SolidX.

A document published Tuesday on the SEC website said the agency received more than 1,300 comments on the proposal. In light of that feedback, the agency found it “appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change.”

Last month, the SEC cited similar reasons for delaying its decision on the Direxion BItcoin ETF proposal until Sept. 21.

For many, the VanEck SolidX Bitcoin Trust is the crypto market’s strongest candidate for securitization. Backed by actual bitcoin rather than futures, the proposed fund plans to insure clients’ funds against theft or attack.

According to the document published Tuesday, the SEC will either accept or reject the VanEck-SolidX proposal by Sept. 30.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi