A recent analysis suggests that the abrupt Bitcoin price decline was a response to what was initially perceived as legitimate news regarding the approval of spot ETFs, leading to a classic “sell the news event.”
Conducted by Matteo Greco, a research analyst at Fineqia International, the analysis challenges the notion that the significant sell-off in the Bitcoin market was solely due to fake news. Greco revealed that the price hit a minimum of approximately $44,750 precisely one minute before Gary Gensler’s tweet.
At 21:11 UTC, when the SEC’s tweet announcing the approval was posted, Bitcoin’s price was around $46,700. The price surged immediately, reaching $47,400 within a minute and peaking at about $48,000 four minutes later at 22:15. However, BTC quickly reverted to $46,700 within a minute, the same price recorded five minutes before the SEC’s announcement. Subsequently, the price continued to decline, hitting a low of about $44,750 at 21:25 UTC, precisely one minute before Gensler’s tweet.
Following the revelation of the fake news, Bitcoin’s price stabilized in the range of $45,500 to $46,000, currently trading at approximately $45,700.
The official SEC Twitter account, @SECGov, initially announced the approval of all Bitcoin Spot ETF filings at 21:11 UTC. However, just 15 minutes later, at 21:26 UTC, SEC Chairman Gary Gensler tweeted that the SEC’s Twitter account had been compromised, and the tweet was unauthorized. Gensler clarified that the SEC had not approved the listing and trading of spot bitcoin exchange-traded funds (ETFs).
The analysis confirms that the market movement was a reaction to what was believed to be genuine news, resulting in a classic “sell the news event.” This common market pattern involves participants buying leading up to a news event and then selling when the news becomes officially public.
Although the SEC is anticipated to approve a batch of ETFs late Wednesday, executives from some ETF issuers expressed surprise and concern over the initial tweet. There is uncertainty about whether the hack will impact the timeline for spot bitcoin ETF approvals. Bloomberg analysts, however, are increasingly optimistic about the approval of a spot Bitcoin ETF in the United States, with odds exceeding 90%. Despite the recent events, the likelihood of the SEC rejecting proposals is considered minimal, according to Bloomberg ETF analyst Eric Balchunas.