16 October 2023
In a flurry of market activity, false news surrounding the approval of a Bitcoin (BTC) Spot Exchange-Traded Fund (ETF) by the US Securities and Exchange Commission (SEC) sent shockwaves through the cryptocurrency community.
False Rumors of BTC Spot ETF Approval Trigger Volatility
Initially reported by Cointelegraph, the news claimed that BlackRock’s iShares Bitcoin Spot ETF had received regulatory approval.
However, Bloomberg analyst James Seyffart promptly cast doubt on the report’s authenticity, stating that he could not find any confirmation of the news at the time. Seyffart stated:
I believe this to be fake news. While this would be positive for the things we’ve been saying. I can’t find anything that would confirm this at the moment.
Subsequently, BlackRock confirmed to FOX reporter Eleanor Terret that the application was still under review, rendering the initial report false.
The repercussions of this misinformation were immediately evident in the market. BTC experienced a brief surge from $27,800 to $30,000 within minutes as traders reacted to the purported ETF approval news. However, as the truth emerged, the market corrected itself, causing a wave of liquidations.
According to data from Glassnode, the aftermath of the surge saw a significant increase in liquidations. Within four hours, $113.75 million in long positions and $78.87 million in short positions were liquidated, reflecting the volatility and sudden reversal prompted by the false news.
The incident also prompted Cointelegraph to apologize for a post that had disseminated inaccurate information regarding the BlackRock Bitcoin ETF.
The media outlet announced that an internal investigation is underway to determine the source of the misinformation. Cointelegraph stated:
We apologize for a tweet that led to the dissemination of inaccurate information regarding the Blackrock Bitcoin ETF. An internal investigation is currently underway. We are committed to transparency and will share the findings of the investigation with the public once it is concluded within 3 hours.
False Breakout Fails To Dampen Bitcoin Profitable Streak
Despite the false breakout above $30,000, Bitcoin has retained significant profits within 24 hours. Currently trading at $28,100, it remains $1,000 higher than the initial price before disseminating the fake news across all platforms. This marks a 5.1% profit during this period.
Consequently, this positive turn of events has caused Bitcoin to shift from negative to positive figures across various time frames. In the past 7 days, Bitcoin has recorded a 2.6% profit, while over 30 days, it has seen a 6.4% increase. Only in the 14 days was a slight decrease of 0.4%.
Furthermore, a closer examination of BTC’s 1-day chart reveals its ability to surpass significant resistance levels. Notably, Bitcoin successfully overcame two critical moving averages: the 50-day MA at $27,150 and the 200-day MA at $27,030.
These moving averages posed major obstacles for Bitcoin’s price after initially dropping below this threshold.
In addition, Bitcoin managed to break through the $28,000 resistance level, which had previously acted as a significant barrier following the false breakout above this mark.
Moving forward, the sustainability of Bitcoin’s current price level and bullish momentum remains to be seen amidst the circulating rumors surrounding the long-awaited ETF decision by the applicants and the US SEC.
Featured image from Shutterstock, chart from TradingView.com