Bitcoin (BTC) pulled back from yesterday’s high above $28,000 on Wednesday as investors mulled the implications of Grayscale’s court victory over the U.S. Securities and Exchange Commission (SEC). The largest cryptocurrency by market cap was down 2% over the past 24 hours to $27,240, while Ether (ETH) slightly outperformed, sinking 1.7% in the past 24 hours and hovering just above $1,700.
The broader crypto market mirrored the two leading assets’ move, with the CoinDesk Market Index dipping 2.4%. Cardano’s ADA, Solana’s SOL and Polygon’s MATIC led the decline among major altcoins, falling near 4% during the day and erasing most of their Tuesday advance.
The federal appeals court’s decision to order the SEC to review its rejection of Grayscale’s bid to convert its $14 billion Grayscale Bitcoin Trust (GBTC) into a spot bitcoin exchange-traded fund (ETF) sparked an immediate rally in digital asset prices and crypto-related stocks. Market observers hailed the decision as a landmark win that could potentially pave the way for a spot BTC ETF in the future.
Clara Medalie, director of research at Kaiko, noted that the rally was accompanied by modest trading volumes on exchanges relative to other mini bull markets, spiking only to a two-week high. This could signal some weakness behind the move, she said. However, average BTC buy orders jumped to the highest since June, suggesting activity from large investors, which Medalie evaluated as good news.
Market analyst Garreth Soloway forecasted further downside for bitcoin’s price in case it fails to break decisively above the $28,000 level where it traded before mid-August sell-off. $28,000 is the price level at which the BTC price broke down. It is not uncommon for price to retrace to that level after a correction, he said. The support level to watch is around $25,000, the price at which bitcoin sat in mid-June when Blackrock filed for a spot BTC ETF.
Grayscale’s court victory over the SEC has sparked a rally in Bitcoin and other digital assets, but will it last? While it’s too early to tell, market observers have noted that the rally was accompanied by modest trading volumes on exchanges, signaling some weakness behind the move. However, average BTC buy orders jumped to the highest since June, suggesting activity from large investors. Market analyst Garreth Soloway forecasted further downside for bitcoin’s price in case it fails to break decisively above the $28,000 level.