Bitcoin’s rise, which started with “Uptober,” continues in November, but the market is expecting more. With hours left until the weekly close, both bulls and bears are struggling for a favorable finish. Bitcoin dropped below $38,000 a few hours ago. So, what caused this drop?
On November 21, the US Department of Justice announced sanctions against CZ and Binance with great fanfare. Up to that point, everything was acceptable and even stimulating for the market, but what surprised investors was the decision to prohibit the former CEO from leaving the country before the court ruling. This raised questions about whether the former CEO would receive a prison sentence.
CZ had already announced that he would provide remote consulting services, but if he were to be sentenced to prison, it could negatively affect Binance’s reputation. On the other hand, the new CEO Teng stated in his announcement today that the senior management will continue their duties as before.
One of the main reasons for the drop was that large investors somehow reduced their long positions in futures. The closure of a long position worth 8,000 BTC pulled the BTC price below $38,000. This may reflect both the motivation to realize profits and the investors’ desire to balance risk.
The SEC postponed its decision regarding Grayscale’s Ether futures ETF on November 15. Some analysts believe that the 19b-4 form submitted by Grayscale could be a potential “Trojan horse” for the institution. BlackRock thinks that the SEC no longer has a legitimate reason to reject ETFs. The ETF applications for Hashdex and Global X on November 17 and Franklin Templeton on November 28 were postponed. For now, investors are waiting for January.