Bitcoin Prices Forecast: How Hashdex Aims to Mitigate BTC Spot Market Manipulation

Key Insights:

• Bitcoin (BTC) ended the week down by 1.29% at $26,155 while avoiding sub-$26,000 levels for the second consecutive session.
• Hashdex, a crypto asset manager, is vying to be the first to receive SEC approval for a BTC-Spot ETF.
• Pending SEC decisions on BTC-Spot ETF applications could fuel an influx of sticky institutional money, a bullish scenario.

The Sunday Overview

Bitcoin (BTC) gained 0.29% on Sunday. Reversing a 0.19% loss from Saturday, BTC ended the week down 1.29% to $26,155. Significantly, BTC avoided sub-$26,000 for the second consecutive session.

Bitcoin Spot ETFs Remain the Centre of Attention

This weekend, Hashdex, a crypto asset manager, entered the race to become the first to receive the SEC nod to launch a BTC-Spot ETF. Despite the increasing number of applications awaiting an SEC decision, the SEC has offered no clues on its intentions regarding the crypto spot market.

According to the NYSE filing, the Hashdex Bitcoin ETF investment strategy differs from previous BTC-spot ETF applications,

“Investment strategy: The Fund will hold a mix of spot Bitcoin, Bitcoin Futures Contracts, and cash and cash equivalents, subject to certain investment restrictions.”

Significantly, the filing elaborates on its physical Bitcoin purchases, stating,

“The Fund will use the CME Market’s Exchange for Physical (EFP) transactions to acquire and dispose of Spot Bitcoin, instead of transactions on unregulated spot exchanges.”

In addressing SEC concerns over market manipulation or fraudulent activity, the filing stated,

“The only non-cash assets held by the Fund (Bitcoin Futures Contracts and Bitcoin via EFP) would be traded on the CME Market, such that the exchanges’ ability to share information pursuant to their common ISG membership could assist in detecting and deterring fraudulent or manipulative misconduct related to those assets.”

The Fund also has proposed investment restrictions to mitigate risks stemming from spot market manipulation by ensuring that ‘the CME Market is the only market of significant size.’

From the Fund structure, Hashdex appears to have noted SEC concerns relating to crypto spot market manipulation.

Earlier this month, the SEC opened the Ark Invest application for public comment. The SEC focal points were on market manipulation and the proposed surveillance-sharing agreement.

An SEC response to the Hashdex application will draw interest, with the SEC unable to raise concerns over market manipulation and unregulated exchanges.

The Monday Session

It will likely be another range-bound session today. Investors await updates from ongoing SEC cases against Ripple, Coinbase, and Binance. The pending SEC decisions on the pending BTC-Spot ETFs are another drag.

The approval of one, some, or all of the BTC-Spot ETF applications would likely fuel an influx of sticky institutional money, a bullish scenario.

However, interest in the ongoing SEC v Coinbase (COIN) case has grown, increasing investor sensitivity to case-related updates.

Amicus Curiae attorney and CryptoLaw founder John E. Deaton shared his views on the Coinbase case. Deaton sees SEC v Coinbase and Grayscale v SEC as landmark cases for the US digital asset space.

Bitcoin (BTC) Price Actions

Daily Chart

The Daily Chart showed BTC above the $25,650 – $25,340 support band. However, the range-bound weekend left BTC below the 50-day and 200-day EMAs, sending bearish near and longer-term price signals.

Looking at the 14-Daily RSI, the 25.51 reading showed BTC in oversold territory. The RSI and EMAs signal a return to sub-$26,000 to give the bears a run at the $25,650 – $25,340 support band. However, a BTC return to $26,500 would bring the lower level of the $26,850 – $27,500 resistance band and the 200-day EMA into play.

4-Hourly Chart

Looking at the 4-Hourly Chart, BTC remains below the $26,850 – $27,500 resistance band. BTC also sits below the 50-day and 200-day EMAs, reaffirming bearish near-term price signals.

The 14-4H RSI reading of 43.99 reflects a bearish sentiment, with selling pressure outweighing buying pressure. Significantly, the RSI and the EMAs signal a return to sub-$26,000 to give the bears a run at the $25,650 – $25,340 support band. However, a move through the 50-day EMA would bring the lower level of the $26,850 – $27,500 resistance band into play.