Bitcoin ETF approval ‘exercise’ popular sell-the-news reaction – Analyst

On January 9, fake news on the acceptance of a Bitcoin (BTC) exchange-traded fund (ETF) prompted the market to react with a sell-the-news.

On January 9, the official X (formerly Twitter) account of the United States Securities and Exchange Commission (SEC) published fake news that the regulator had approved several Bitcoin ETFs for listing on registered exchanges. SEC Chairman Gary Gensler then took to X to warn that his SEC account had been hacked and that the agency no longer approved Bitcoin ETF products.

According to K33 research analyst Vettel Lunde, the fake news on the ETF approval gave an indication of how the market might react to the real approval news.

“The market showed its hand yesterday; the ETF approval exercise favors news selling,” Lunde wrote on X. The analyst emphasized that few viewed the SEC's approval announcement with any skepticism in the first 14 minutes after its publication.

“Immediately after the announcement, longs crowded the market and forced the whipsaw in the next few minutes. BTC headed down; The SEC ‘stepped in' and created a bottom after confirming the hack,” Lunde noted.

The analyst noted that BTC rose to $47,870 in four minutes following the false confirmation, before falling sharply to $46,000 in the next 10 minutes.

Some prominent industry executives had earlier predicted that the market would react to the news of the ETF's confirmation by selling off in the short term.

Cathy Wood, founder, CEO and potential Bitcoin ETF developer ARK Invest, expects some investors to sell on the news of ETF approval as there was a big expected movement around this market event.

“This is going to be very short-term because we think it's going to be here that the SEC is going to give the green light for institutional investors to participate in the Bitcoin ETF,” Wood suggested by the end of 2023. -Time response is promising and more important.

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Some analysts and traders agree that the potential approval of a Bitcoin ETF is unlikely to trigger any further positive market movements. According to analysts at QCP Capital, the ETF's approval is “largely priced in, and there may not be a large rally to post approval.”

“The initial reaction to the ‘approval' was muted as BTC failed to trade above the resistance area,” QCP wrote in a market update on January 10.

“It was clear to sell the news,” one trader wrote on X. 10.

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