A cryptocurrency analyst and trader is warning that one event could trigger Bitcoin (BTC) to collapse by double digits.
The analyst pseudonymously known as DonAlt tells 56,200 subscribers of the TechnicalRoundup YouTube channel that if the U.S. Securities and Exchange Commission (SEC) declines to approve a spot Bitcoin exchange-traded fund (ETF), BTC could nosedive by approximately 37% from the current level.
“We can talk about what happens if we get a denial. It’s pretty simple to me. I think it would undercut at least this consolidation [from around $33,000 – $38,000], if not the origin of the move which is down here [around $24,000].
So if the ETF gets denied, basically the market structure wasn’t really like too favorable down here [just above $24,000] and the reason in my opinion why went up from $27,000, $28,000 was basically almost entirely the ETF.
So if we get a denial, we would return kind of to that area. So that’s like the worst case – denial takes us to $27,000, $28,000.”
Bitcoin is trading at $42,796 at time of writing.
The pseudonymous analyst also says that the approval of spot Bitcoin ETF in the US could also have a bearish impact on BTC.
“An approval, a lot of people would be like, ‘hey, an approval has to be very bullish’. I would argue we priced in a lot of it, but short term it could lead to some upside.
But I think if you get an approval you would get a spike upwards possibly. I’m not even that sure about that anymore. But you could get a spike upwards that a lot of people would sell into.
And I think that would take us a little bit lower as well… Just kind of go down towards $38,000 range crawl back above $40,000.”
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