The cryptocurrency market has been rocked by a series of unexpected events since yesterday. This includes a tweet from the U.S. Securities and Exchange Commission (SEC) falsely claiming approval for all Bitcoin spot exchange-traded funds (ETFs). However, in the wake of these incidents, Veteran trader Peter Brandt and QCP Capital shared observations and insights into the recent developments, shedding light on potential ironies and market dynamics.
Peter Brandt on SEC and Bitcoin ETFs
In a post, Veteran Trader Peter Brandt noted a historical trend in traditional trading where when the average person shows eagerness to “get in,” it could signal a time to sell. This observation is a cautious approach often adopted by experienced traders.
He points out the irony that Bitcoin maximalists, who value BTC for being outside government control, seem to view the SEC and ETFs as saviors of their financial future. This apparent contradiction leads Brandt to believe that if ETF approval happens, it could trigger a “buy the rumor, sell the news” scenario.
BTC set to surge more?
In response to the SEC’s Twitter account falsely announcing BTC spot ETF approvals, QCP Capital highlights the erratic market reactions. BTC initially surged to $48,000, only to retreat to $45,000 after the SEC claimed it was hacked and had not approved any ETFs.
The muted reaction to the initial ‘approval’ suggests that the market may have already priced in the possibility of an ETF approval. QCP Capital considers this a warning sign, indicating that a significant rally might not follow the actual approval.
QCP Capital sees Ethereum (ETH) as a laggard play, and this view was seemingly confirmed by the ETH/BTC cross performance following the fake announcement. Despite a brief dip below the June 22 low, the ETH/BTC cross quickly rebounded above the 0.051 support level.
The analysis emphasizes that an ETF announcement is likely imminent, given the historical pattern of the SEC approving all ETFs simultaneously. QCP Capital recommends selling the spot-futures basis spread for a risk-free 12-17% annualized return and notes elevated options volatility, expecting it to normalize post-ETF approval.
Bitcoin slipped below $46,000 as anticipation builds for Wednesday’s expected approval of the first Bitcoin ETFs by the SEC. In stock futures, a mixed market persisted, particularly in the tech sector’s rebound from a challenging 2024 start. Despite Tuesday’s Bitcoin turbulence, uncertainty lingers as SEC Chair Gary Gensler clarified no spot Bitcoin ETF approval had been granted. Four potential scenarios await the SEC’s decision.
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