Santiment, a behavior analytics platform for digital assets, has stated that the digital asset sector relies heavily on the stability of Bitcoin to thrive, while noting that BTC’s decline to $45,000 led to other digital assets rising significantly.
In a post on social media platform X, Sentiment noted that following Bitcoin’s decline from $47,000 to $45,000, many investors have started trading into more “speculative assets.”
Santiment: Bitcoin to Govern Other Digital Assets’ Movement
Santiment noted that despite other digital assets skyrocketing after the decline in the price of Bitcoin, a lack of confidence in the sector’s top asset would result in the downfall of the market capitalizations of other assets that rely heavily on Bitcoin’s market dominance.
Interestingly, after BTC fell to $45,000 price level, other digital assets went up by double digits, witnessing a sudden surge in trading volumes. It is important to note that the fall in the price of Bitcoin can be attributed to the fake news of Spot Bitcoin Exchange-Traded Fund (ETF) approval, posted earlier on the official X handle of the United States Securities and Exchange Commission (SEC).
Fiasco of Fake News on SEC X Account
The event triggered the digital asset space to respond with a sell-the-news reaction on January 9 as per K33 Research analyst Vetle Lunde.
In an X post, Lunde called the fake ETF approval post a “rehearsal” for the actual approval of a Spot Bitcoin ETF in the US. “The market showed its hands yesterday; the ETF approval rehearsal favors a sell-the-news reaction,” the analyst wrote while adding:
“Immediately after the announcement, longs quickly crowded the market, enforcing a whipsaw in the following minutes. BTC was headed lower; the SEC ‘stepped in’ and formed a bottom after confirming the hack.”
In the 15 minutes that the now-deleted X post was up on SEC’s X account, BTC rose to $47,870 while dropping to $46,000 in the next 10 minutes.
Bitcoin Price After ETF Approval
The application of numerous asset management firms like BlackRock, Grayscale, and VanEck for a Spot BTC ETF in the US was accepted by the SEC on Wednesday afternoon. Further, founder, CEO, and chief investment officer of ARK Invest, another ETF applicant, Cathie Wood, also predicted earlier that bitcoin’s price would fall after the approval of applications.
“Those who have been moving in and enjoying some nice profits will probably ‘sell on the news.’ That’s an expression that traders use, so you anticipate the event, beat up the price, and then sell on the news,” Wood predicted in December 2023 while advising investors to maintain a long-term vision.
Wood also noted that the duration of the sell-off after Spot BTC ETF “would be very short-term because what we think is going to happen here is that the SEC is going to be giving the spot Bitcoin ETF the green light for institutional investors to participate.”
The ARK Invest executive has also believes that the US is falling behind in the Bitcoin movement due to its unfriendly regulatory system.
