Bitcoin consolidates below $29,500 as traders await SEC decisions on ETF applications

(Kitco News) – CPI day came and went with little reaction from the crypto market as Bitcoin (BTC) continues to trade sideways below $29,800 while the majority of altcoins in the top 200 traded within 3% of Wednesday’s prices.

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Stocks initially responded positively to the CPI report, which showed that while inflation slightly reaccelerated in July, coming in at 3.2% as compared to June’s reading of 3%, prices rose at their slowest pace since October 2021, which suggests that the Federal Reserve’s fight against inflation appears to be headed in the right direction.

But the post-CPI momentum faded as the trading day progressed, resulting in the major indices trading near even at midday, before ultimately finishing the session higher. At the closing bell, the S&P, Dow, and Nasdaq were up 0.03%, 0.15%, and 0.12%, respectively.

Data provided by TradingView shows that Bitcoin’s price continues to compress, trading within a range of $29,305 and $29,715 on Thursday, prompting many analysts to warn that a breakout is imminent, but the direction is yet to be determined.

BTC/USD Chart by TradingView

Kitco senior technical analyst Jim Wyckoff said “September Bitcoin futures prices [were] a bit weaker in early U.S. trading Thursday, following solid losses Wednesday, which followed good gains Tuesday.”

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Bitcoin futures 1-day chart. Source: Kitco

“Prices continue in a sideways and choppy grind,” Wyckoff added. “Neither the bulls nor the bears are able to gain much traction. The direction in which prices break out above the resistance line or below the support line [on the chart above] is likely to be the direction of the next trending price move in the market.”

As for what could be the spark that initiates the next move, Markus Thielen, Head of Research at Matrixport, pointed to upcoming Securities and Exchange Commission (SEC) developments, including an Aug. 13 deadline to respond to the ARK-21Shares Bitcoin ETF re-filing and an Aug. 15 deadline to respond to Grayscale’s GBTC lawsuit filing.

“More SEC responses will also be expected during the first week of September, when seven other Bitcoin ETF filings are required to receive a response from the SEC,” Thielen said. “The possibility is high that several Bitcoin ETFs would be approved in short order, igniting the next leg higher in Bitcoin prices as those ETF providers would spend considerable marketing expenses to draw in retail and institutional capital.”

“While Bitcoin prices could continue to consolidate or even correct slightly in the short term, any SEC approval could have a material positive impact,” he added. “Investors should have sufficient upside exposure on any day when the SEC is scheduled to respond to the ETF Applications.”

While the SEC has a deadline of Aug. 13 to rule on ARK’s BTC ETF application, the regulator does have the option to extend the time to make its final ruling as it judges the practicability of the surveillance-sharing agreements with Coinbase, which Thielen warned could result in a short-term price correction.

“This could then cause [a] dip in mid-September which we believe would be the dip to buy,” he said. “Bitcoin prices could decline to $26,000/$27,000 as the summer lull ends. This could be an attractive buying opportunity for the seasonal rally in Q4.”

As for BTC’s macro outlook, Thielen said Matrixport has a price target of $45,000 by December 2023, $63,160 by March 2024, and $125,731 by December 2024.

Altcoin market mixed

It was a mixed day for the altcoin market with a pair of tokens recording double-digit gains while the majority of tokens saw relatively flat price action.

Daily cryptocurrency market performance. Source: Coin360

Akash Network (AKT) was the breakout token of the day with an increase of 31% to trade at $0.98, while XDC Network (XDC) gained 10.5%. Worldcoin (WLD) was the biggest loser with a decline of 8.46%, followed by a decrease of 6.72% for UniBot (UNIBOT) and a 4.25% decline for XRP.

The overall cryptocurrency market cap now stands at $1.17 trillion, and Bitcoin’s dominance rate is 48.7%.