- After Grayscale’s victory on Tuesday, Bitcoin’s major price surge paused. Since the news broke, the digital asset dropped from its peak of $28,100 to just above $27,000.
- Mourad described recent BTC exchange outflows as “commonly seen during periods of financial uncertainty.” According to the analyst, over 20,000 Bitcoins were withdrawn from exchanges following the recent price increase.
- The commission has 45 days to request a general hearing to review Tuesday’s decision by all 17 judges in the US Court of Appeals.
Bitcoin Enters a Period of Pause Following Grayscale’s SEC Victory; What’s Next for Bitcoin?
Bitcoin Pauses After Grayscale’s Victory
After Grayscale’s victory on Tuesday, Bitcoin’s major price surge paused. Since the news broke, the digital asset dropped from its peak of $28,100 to just above $27,000. Bitcoin, the world’s largest cryptocurrency by market value, decreased by 0.7% in the last 24 hours, falling to $27,200.
MicroStrategy shares also dropped by 2.2% to $373.89. This stock related to Bitcoin had increased by 10.8% after becoming a party in Grayscale Investments’ lawsuit against the Securities and Exchange Commission, according to the US Court of Appeals’ opinion.
CryptoQuant data analyst Adam Mourad offered a cautious perspective following Tuesday’s decision:
“The cryptocurrency landscape is still subject to the dynamic interaction of various factors such as regulatory developments, market sensitivity, and macroeconomic trends.”
Mourad noted that Bitcoin’s recent price surge pushed the digital asset to the Short-Term Holder Realized Price level, indicating that it matched the average acquisition price of holders who held Bitcoin for less than 155 days.
As the price exceeded this level, short-term holders started making profits, leading to increased selling pressure. According to the data analyst, this intersection is a “critical testing ground for both support and market sensitivity.”
Mourad described recent BTC exchange outflows as “commonly seen during periods of financial uncertainty.” According to the analyst, over 20,000 Bitcoins were withdrawn from exchanges and transferred to cold wallets following the recent price increase.
Mourad said, “This maneuver can be interpreted as an attempt to protect invested capital from ongoing market instability,” and he noted that the recent price movement indicated that investors were waiting for more favorable market conditions to execute their sell orders.
Increasing Bitcoin Open Positions
Mourad, on the contrary, regarded the recent increase in Bitcoin’s open positions as “a constructive measure of sensitivity.” In the hours following the Grayscale news, Bitcoin’s open positions increased by approximately $700 million.
Mourad stated, “This rise in open positions highlights the market’s rapid and strong response, demonstrating collective bullish sentiment and expectation.” Within this increase in open positions, he noted a significant rise in long positions and added:
“The addition of long positions is a clear indication of market participants’ confidence in the future trajectory of Bitcoin and the overall cryptocurrency market.”
Guilhem Chaumont, co-founder of Flowdesk, pointed out another bullish signal:
“Building financial products on Bitcoin, such as ETFs, should now be easier. We wouldn’t be surprised if this is seen as the first in a series of positive news regarding regulatory acceptance in the US. We believe that the regulatory landscape in the US will clarify in the coming months to enable widespread institutional adoption.”
Reevaluation of Grayscale’s Victory
Mark Palmer, an analyst at Berenberg Capital Markets, said the decision would not pave the way for the first spot Bitcoin ETF in the US:
“The court did not force the SEC to approve a spot Bitcoin ETF, but it ordered the commission to review the arguments used by Grayscale to support the denial of its application. Therefore, we believe that the SEC can create alternative arguments based on specific concerns related to the spot Bitcoin market when rejecting spot Bitcoin ETF applications.”
The SEC has the option to appeal the court’s decision. The commission has 45 days to request a general hearing to review Tuesday’s decision by all 17 judges in the US Court of Appeals.
