Why BlackRock Bitcoin ETF Speculation Could Lead to a 30% Decline

Bitcoin has once again captured the attention of the cryptocurrency market by surging past the $30,000 mark on Monday, October 16. This sudden price increase has been attributed to rumors suggesting that the United States Securities and Exchange Commission (SEC) has approved BlackRock’s Spot Bitcoin Exchange-Traded Fund (ETF).

Despite the recent price surge, technical analysts have noticed a bearish pattern forming on Bitcoin’s daily chart. The pattern is known as a “head-and-shoulders” formation, which typically indicates a potential market reversal. If the support level at $25,000 is breached, there could be a 20% correction in Bitcoin’s value, bringing it down to around $20,000 or even lower.

“No changes. $19,000-$20,000 should be next. Then $12,000,” the trading veteran said.

Bearish Outlook After Bitcoin ETF Rumors

The renowned technical analyst Crypto Capo has identified the formation of a “head-and-shoulders” pattern on Bitcoin’s daily chart. This pattern, characterized by three peaks with the central peak (the “head”) being higher than the flanking peaks (the “shoulders”), often signals a potential market reversal.

The recent surge above $30,000 is seen as the formation of the right shoulder in this technical pattern. If the support level at $25,000 is broken, Bitcoin could experience a 20% correction, potentially falling to around $20,000 or lower.

However, it is important to clarify the catalyst behind Bitcoin’s recent price surge. A news update by CoinTelegraph falsely reported that the SEC had approved BlackRock’s iShares Spot Bitcoin ETF. This report was quickly debunked by Fox Business after reaching out to BlackRock directly. CoinTelegraph later issued a public apology for spreading this false information.

BlackRock’s CEO Remains Optimistic About Crypto

Amidst the volatility in Bitcoin’s price, BlackRock CEO Larry Fink has shared his perspective on the matter. Fink was not aware of the rumors surrounding the ETF until later, but he highlighted the broader implications of Bitcoin’s popularity. He stated that the rally was influenced by global issues and concerns about terrorism worldwide.

“I cannot talk about the specifics of anything, but this is an example of the pent-up interest in crypto and what we hear from clients around the world about the need for crypto. I think some of this rally is way beyond the rumor and I think the rally is about all the issues around Israeli war,” Fink said.

Fink presented a nuanced view of the crypto market, suggesting that the rally was not solely driven by the rumors. Instead, he identified a trend where individuals turn to “flight quality” assets during times of global unrest, such as treasuries, gold, or cryptocurrencies.

“I believe crypto will play that role as a flight to quality,” Fink firmly asserted.

When considering the big picture, technical patterns can provide valuable insights into potential market trends. However, they must be analyzed within the broader macroeconomic context. This includes taking into account the sentiments expressed by influential industry leaders regarding the growing demand for Bitcoin.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. The information provided in this news article aims to be accurate and timely. However, readers are advised to independently verify the facts and consult with professionals before making any decisions based on this content.

Editor Notes

It’s no surprise that investors and traders have been speculating about a potential Bitcoin ETF from BlackRock, considering the significant impact it could have on the market. While the recent rumors may have contributed to the price surge, it’s important to approach such news with caution and conduct thorough research before making investment decisions.

If you’re interested in staying updated with the latest news and insights from the world of cryptocurrencies, be sure to check out Uber Crypto News. They provide comprehensive coverage and analysis of the crypto market, helping investors make informed decisions.