Market Analyst: Bitcoin Needs SEC Blessing to Continue Rally

As Bitcoin’s price continues to trade sideways amidst a bout of low trading volume, investors are becoming increasingly keen to know which direction Bitcoin will move next. This will likely signal the continuance or reversal of the persisting bear market trend.

Today, Bitcoin was trading relatively flat, trading within the tightening range between $6,500 and $6,700, at a current price of $6,550 at the time of writing.

Bitcoin has been caught in an unprecedented and tightening range for the past month, with some analysts attributing it to a maturing market, while others believe that it is like a spring, coiling for its next big price swing.

While speaking to MarketWatch, Naeem Aslam, the chief market analyst at Think Markets U.K., said that Bitcoin may trade flat until there is greater regulatory clarity from the U.S. Securities and Exchange Commission (SEC), and that for a trend reversal to occur, the SEC will likely have to give Bitcoin its explicit blessing.

“Bitcoin needs some sort of a blessing and only that can revitalize the rally for the currency,” Aslam said. As to who will give this blessing, Aslam believes that it will be the SEC:

“I think that the SEC seeking a public opinion about the Bitcoin ETF is a positive sign, the department perhaps wants to respect the public opinion and most importantly wants to see the accurate landscape,” he said.

Importantly, Aslam also noted that the public perception of the Bitcoin ETF could play a big role in its approval, with the regulators seeking guidance from prospective investors while formulating their decision.

“If the public interest shows that the support is in favor of ETF it is highly unlikely that the department would reject an actual application which satisfies their criteria,” he added.

Investors Should Wait for Bitcoin to Break Its Trading Range Before Investing, Says Analyst 

Although Aslam believes that it will take the SEC to break Bitcoin’s current trading range, other analysts are warning investors to wait for the range to break before entering, or re-entering the markets.

In a recent note to investors, Rob Sluymer, a technical strategist at Fundstrat Global Advisors, explained that investors would be wise to sit on the sidelines while Bitcoin ranges, waiting for a trend confirmation before investing.

“Investors should remain patient and wait for evidence of an improvement in ‘trend’ before increasing exposure,” Sluymer noted.

He also added that the key levels that should be watched for are September’s highs, which, if broken, could signal a market reversal.

“A move above the September real and relative highs remains the key resistance/reversal level that will need to be exceeded to signal the early stages of a trend reversal,” he said.

It is likely that Bitcoin’s trading range will be broken in the coming days or weeks, the question is: which way will it break, and what does that mean for its future?

Featured image from Shutterstock.

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Source: Newsbtc