Crypto currency investors’ morale deteriorated as the S&P 500 index ended at 4,515 on September 1, just 6.3 per cent below its all-time high from January 2022

A Bitcoin price correction down to $22,000 is becoming increasingly likely, as BTC derivatives have begun to show bearish tendencies.

The price chart of Bitcoin leaves little doubt that investor sentiment has aggravated since Grayscale’s much-hyped legal win against the US Securities and Exchange Commission on August 29 and the SEC’s ensuing delay of several spot BTC exchange-traded fund (ETF) applications.

The vital question remains whether the possibility of an exchange-traded fund can outweigh the increasing risks.

By August 18, the entire 19 per cent rally that took place after BlackRock’s initial ETF filing had completely reversed as Bitcoin pulled back to $26,000.

Next, there was a unsuccessful attempt to recoup the $28,000 support as investors raised the odds of an ETF approval after the positive news regarding Grayscale’s Bitcoin trust request.

Crypto currency investors’ morale deteriorated as the S&P 500 index ended at 4,515 on September 1, just 6.3 per cent below its all-time high from January 2022. Even gold, which has not been able to break above $2,000 since mid-May, is 6.5 per cent away from its all-time high. As a result, the general feeling for Bitcoin investors just seven months prior to its halving in 2024 is definitely less positive than anticipated.

Some experts pin Bitcoin’s lacklustre performance on the ongoing regulatory actions against the two leading exchanges, Binance and Coinbase. Furthermore, several sources claim that the U.S. DOJ is likely to indict Binance in a criminal investigation. The claims are based on allegations of money laundering and potential infringements of sanctions involving Russian entities.

North Node Capital CIO and Bitcoin supporter Pentoshi summed up the present conditions in a post on X (formerly known as Twitter).

As per Pentoshi, the potential gains from a spot exchange-traded fund approval outweigh the price impact of regulatory actions against the exchanges. There is no way to find out whether such an assumption is valid, but such an assessment fails to consider that U.S. inflation, as measured by the CPI, has dropped to 3.2 per cent in July 2023 from 9.1 per cent in June last year.