After the close of U.S. markets Wednesday, the Securities and Exchange Commission (SEC) rejected nine applications for bitcoin exchange traded funds from three issuers. The SEC’s Division of Trading and Markets rejected applications from investment firms ProShares, Direxion and GraniteShares.
While the largest cryptocurrency by market capitalization immediately sold off on the news, buyers stepped in and bitcoin’s losses Thursday were contained.
The SEC stated, “Among other things, the Exchange has offered no record evidence to demonstrate that bitcoin futures markets are ‘markets of significant size.’ That failure is critical because, as explained below, the Exchange has failed to establish that other means to prevent fraudulent and manipulative acts and practices will be sufficient, and therefore surveillance-sharing with a regulated market of significant size related to bitcoin is necessary.”
On Thursday, bitcoin resided just under $6,500, prompting some market observers to note some of the digital currency’s technical indicators remain healthy, even after another batch of ETF rejections.
Looking at the Moving Average Convergence Divergence
Some technical analysts believe bitcoin’s Moving Average Convergence Divergence, the MACD, still looks solid.
“Data collected by TradingView found BTC is looking bullish. The bitcoin MACD line went above the signal line late on Tuesday and has so far stayed in the bull region, at least until the time of writing. The conventional 12-26 EMA formula shows the market recovering well, regardless of the SEC’s ETF rejection news; the more sensitive 5-35 EMA MACD (using a 5-EMA signal) indicates a slight drop in momentum, which has already started to pick up again,” according to Crypto Briefing.
Related – Brian Kelly: Bitcoin ETFs Face Legal Labyrinth to Legitimacy
The MACD indicator has previously proven reliable with bitcoin and signaled the start of new bull markets for the cryptocurrency.
“The bitcoin MACD correctly indicated three major bull trends since the start of the year. In mid-February, where following an unexpectedly bullish congressional hearing BTC rose above the $10,000 mark; at the start of a month-long bull-run in early April; and in mid-July when market euphoria waxed leading up to the first SEC ruling deadline for the CBOE bitcoin ETF,” reports Crypto Briefing.
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