SEC Shocks Market by Not Appealing Grayscale BTC Trust Case - What's Next for Crypto Rally?

The cryptocurrency market experienced a corrective phase last week (October 9-15) following its previous upward trajectory, yet the overall bullish trend remained intact.

Total market capitalization saw a decline, moving from $1.09 trillion to a low of $1.04 trillion, marking a 4.59% decrease. Currently, it has rebounded to $1.05 trillion.

The market sentiment index stayed below 50, dropping to 46, reflecting ongoing cautiousness among investors.

Major cryptocurrencies exhibited bearish trends, with Binance Coin (BNB) and OKEx Coin (OKB) showing modest gains of 2%, outperforming other platform tokens.

Avalanche (AVAX) reversed its previous strong performance, declining by 4%, while Polkadot (DOT) continued its downward trend with a 3% drop.

Bitcoin (BTC) saw a 2% price decrease, with its market share slightly dropping to 50.3%. Ethereum (ETH) experienced a 1% decline, maintaining a 17.7% market share.

October 16 marked a significant deadline in the Grayscale Bitcoin Trust (GBTC) case, as the SEC opted not to appeal the court's ruling. This decision paves the way for Grayscale to convert GBTC into a Bitcoin spot ETF, with the court expected to finalize the authorization within seven days.

The U.S. Court of Appeals for the District of Columbia had previously ruled in favor of Grayscale on August 29, but the possibility of an SEC appeal left the outcome uncertain. With the appeal window now closed, the path is clear for GBTC's transformation into an ETF.

This development has positively impacted BTC and the broader cryptocurrency market, with prices rallying in response. Additionally, NFT trading volume surged by 15% in the 24 hours following the news, accompanied by a 6% increase in active investors, as reported by CryptoSlam.

Grayscale's victory over the SEC carries significant implications for the cryptocurrency market, particularly for BTC's future. Here's how the conversion of GBTC into a BTC spot ETF could benefit the market:

1. Enhanced Accessibility: GBTC's transition from a closed-end fund to an open-end ETF will lower entry barriers for retail investors, enabling direct trading on exchanges and improving liquidity.

2. Fairer Pricing: Unlike GBTC, which often trades at premiums or discounts to its net asset value, ETFs align more closely with market prices, ensuring greater transparency and fairness.

3. Institutional Participation: The regulatory alignment of BTC spot ETFs with traditional financial markets will likely attract more institutional investors, further legitimizing BTC as an asset class.

In summary, the approval of GBTC's conversion into a BTC spot ETF represents a milestone for BTC, fostering broader participation and growth in the cryptocurrency ecosystem.

BTC opened at $27,900 on October 9, experiencing a downward trend with three consecutive bearish candles. However, support at $26,500 on October 11 and 12 halted further declines, as indicated by long lower shadows.

Following a period of consolidation, BTC resumed its upward trajectory, approaching the previous high of $28,000 with a strong bullish candle.

The $28,000 level serves as a critical resistance point, being both the previous high and the midpoint between $25,000 and $31,000. However, weekly charts reveal a bullish engulfing pattern, signaling renewed bullish dominance.

Positive developments, including the SEC's decision and geopolitical tensions, are expected to fuel further BTC price appreciation. Our target remains $31,000, representing the upper boundary of the current trading range.