Bitcoin Soars on Grayscale’s Legal Victory over SEC. What’s Next for BTC/USD?

BITCOIN FORECAST

• BTC/USD soars and breaks above its 200-day simple moving average, boosted by Grayscale’s legal victory
• The SEC’s defeat in the U.S. court system may have positive implications for cryptocurrencies
• This article looks at Bitcoin’s key technical levels to watch in the near term

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Bitcoin staged a remarkable and vigorous rally on Tuesday, jumping more than 7% and breaking above its 200-day simple moving average handily, propelled by a pivotal and game-changing legal development in the U.S. legal system that promises to reshape the landscape of digital tokens.

In a significant turn of events, the U.S. Court of Appeals for the DC Circuit ruled that the Securities and Exchange Commission (SEC) was wrong in denying investment giant Grayscale’s request to convert its popular bitcoin trust GBTC into an Exchange-Traded Fund (ETF), asserting that the decision was “arbitrary and capricious”.

The legal saga had its origins in 2022 when the SEC, under the leadership of Gary Gensler, was sued for blocking Grayscale’s application to list an ETF that tracks the price of bitcoin on the basis that spot transactions in this asset were unregulated and subject to market manipulation.

While the SEC may explore avenues to overturn the judgment, such as appealing to the Supreme Court or seeking a rehearing, it is unclear if it will do so. For now, the ultimate outcome remains uncertain, but should Grayscale prevail, the federal regulator may be forced to revisit its earlier verdict and possibly greenlight the original petition, paving the way for the first crypto ETF.

We will have more information soon to better assess the outlook for the cryptocurrency realm. In the meantime, it would not be surprising to see a growing wave of positive sentiment fostered by speculation that the court system would curtail stringent government regulations within the space. This could amplify BTC/USD’s upside, boosting its recovery heading into September.

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BITCOIN TECHNICAL ANALYSIS

After Tuesday’s powerful rally, Bitcoin recaptured its 200-day simple moving average and cleared a key ceiling at $27,500. If this bullish breakout is sustained, buying interest could gather pace upcoming trading sessions, setting the stage for a move to $28,500, followed by $29,000. On further strength, a retest of the $30,000 becomes likely.

On the flip side, if sellers return to the market and spark a bearish reversal, initial support appears at $27,500 and $25,800 thereafter. Further down the line, attention shifts to the August lows, situated just a touch above the psychological $25,000 level.

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BITCOIN TECHNICAL CHART

Bitcoin Chart Created Using TradingView