Why BlackRock Bitcoin ETF Rumors Could Trigger a 30% Drop

Bitcoin stole the crypto spotlight after surging past $30,000 on Monday, October 16. Market watchers attribute this rise to the fact that the US Securities and Exchange Commission (SEC) has given BlackRock's Spot Bitcoin ETF a green light.

While the recent price action appears to have created a technical pattern on Bitcoin's daily chart, BlackRock CEO Larry Fink says it's an example of “extreme interest in crypto.”

Bearish picture after Bitcoin ETF rumours

Renowned technical analyst Crypto Capo noticed a pattern on Bitcoin's daily chart known as the “Head and Shoulders”. Easily identified by three highs where the central peak (the “head”) is higher than the flanking peaks (the “shoulders”), this unique pattern often signals a market reversal.

Bitcoin's recent rally above $30,000 appears to have formed the right shoulder of this technical pattern. Therefore, a breach of the $25,000 support level could result in a 20% correction, which would drag Bitcoin's price down to $20,000 or below.

“No changes. $19,000-$20,000 should be next. Then $12,000,” said the veteran trader.

Read more: How to Shorten Bitcoin: A Step-by-Step Guide

However, it is crucial to clarify the motivation behind the recent Bitcoin price surge. A recent news update by CoinTelegraph incorrectly reported the SEC's approval of the iShares Spot Bitcoin ETF. Fox Business was quick to break this report after reaching out to BlackRock directly. Realizing the “fake news”, CoinTelegraph issued a public apology soon after.

Blackrock has been bullish on Crypto

Amid Bitcoin price volatility, BlackRock CEO Larry Fink shares his thoughts. Contrary to widespread buzz, Fink wasn't late to the rumors.

Still, Fink emphasized the broader implications of Bitcoin's popularity, noting that the rally has influenced many global issues and the threat of global terrorism.

I can't go into detail about anything, but this is an example of the interest in crypto and the importance of crypto we hear from customers around the world. “I think some of this rally is more than a rumor and I think the rally is about all the issues surrounding the Israeli war,” Fink said.

Fink offered a different view of the crypto market, saying that the rumor didn't just push the rally. Instead, he identified a pattern in which individuals gravitate toward “flight-quality” assets during periods of global uncertainty, such as Treasuries, gold or cryptocurrencies.

“I believe crypto will play that role as a quality flight,” Fink asserted.

Read more: 7 ways to buy Bitcoin and other cryptocurrencies with Apple Pay

In the grand scheme of things, while technical patterns provide valuable insights into possible market trends, they must be weighed against the broader macroeconomic environment. This includes sentiments expressed by influential industry leaders regarding the growing demand for Bitcoin.