Bitcoin bounced over $1,000 this week on the back of misleading news reports that VanEck and SolidX, the companies behind the most promising Bitcoin ETF project, had finally been granted a license for an ETF instrument when in fact they were launching an ETF substitute. The hype (or lack of it) wasn’t enough to push BTC up and out of its ever-decreasing wedge, meaning that we’re still waiting to see which way the dice will fall in terms of the short-term BTC price.
Misreporting Leads to BTC Pump
The primary cause of the pump was misreporting around the ETF-like instrument being launched by VanEck and SolidX, who used a Securities and Exchange Commission (SEC) exemption to launch a product that will offer institutions shares in the VanEck SolidX Bitcoin Trust, making it similar to an exchange-traded fund but different in several crucial ways. Still, the news was reported with great excitement from some crypto outlets who failed to consider the fact that this was not a true ETF, contributing to a big BTC buy up that shot it up to the $10,800 area.
This is misleading. The VanEck SolidX Bitcoin Trust is *not* an ETF. It looks exactly like the Grayscale Bitcoin Trust, which was launched almost six years ago. Calling this a “limited ETF” is a cute marketing strategy, but that’s about it. Calling it a full ETF is just wrong. https://t.co/e5kyeAE4gC
— Jake Chervinsky (@jchervinsky) September 3, 2019
BTC Remains in the Wedge
The BTC bounce stopped short of breaking out of the wedge that has been forming for several weeks now, which perhaps isn’t surprising given the reason for the push, which didn’t offer the kind of momentum needed to get through. A continuation of historical patterns would see a drop back to the support line, which would be around the $9,400, if we are to continue making higher lows. A drop through and daily close below this region would signal that the wedge has been broken, and those looking to pick up BTC in the $8,000s will likely have a chance to do so. On the flip side, if BTC were to push through and settle at or above $11,200 it should be full steam ahead for the next test of yearly highs.