“Extreme Fear” has engulfed the Bitcoin and cryptocurrency market. The great Evergrande debt crisis triggered a quake that was not limited to the real estate sector. It sent waves through the crypto realm as well. In fact, the crypto market plummeted below the $2 trillion global market cap response to the subsequent Chinese FUD.
The community’s anticipation for a short-term miracle growth might have to wait. Bitcoin’s price, too, for that matter, did not see any positive deviation of late. The price movement remained largely range-bound in the $40k-$45k region for more than a week now. No dramatic action has managed to catapult a much-needed pump despite some DeFi tokens decoupling from the king coin.
Bitcoin and September blues
It is important to note that September pressure is a historical precedent in the Bitcoin market. Many experts believe that a rally usually follows suit. Echoing a similar sentiment was Michaël van de Poppe, who happens to be the CEO and Founder of Eight BV. The exec also observed rising bearishness in the Bitcoin market over the last five consecutive years as the September blues market. However, the markets appear to have gained momentum almost every year following that.
As a result of the dwindling state of the market, fear is rooted in the minds of market players. Hence, the short-term does not look very promising. On the other hand, the medium-term could bring much-awaited respite. How? If the United States SEC gives a green signal to Bitcoin exchange-traded fund [ETF]. The regulatory authority has been hesitant in approving a ton of such applications. However, David LaValle, Grayscale managing director and global head of ETFs, believes that the SEC gives a chance.
Even as SEC Chairman Gary Gensler may not be very keen about the idea of validating investment vehicles that offer exposure to cryptocurrencies, LaValle opined that the watchdogs should let investors pick their own exposure that meets their own investment needs and their own investment thesis. The prominent senior commodity strategist at Bloomberg Intelligence, Mike McGlone, speculated that Bitcoin ETFs should arrive by October end. If this materializes, it could be no less than a game-changer for Bitcoin a potential resumption of a bull run.
The present fundamentals might not look very promising for Bitcoin, but this trend suggests an increased buy power. According to the crypto-analysis platform, Santiment, the BTC supply on crypto exchanges has taken a massive plunge to levels that was last seen over two years ago, meaning less sell pressure among market participants. Its tweet regarding the same read,
“The supply of #Bitcoin sitting on exchanges has fallen to levels not seen since May 2019. This is a solid indication of less sell-off pressure for $BTC. Meanwhile, Tether supply hasn’t been this high since June, an indication of increased buy power.”