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BTC/USD Chart / Source: CoinDesk
Bitcoin prices rallied recently, breaking through the $28,000 as the cryptocurrency experienced some notable gains.
The world's most prominent digital currency climbed to an intraday high of nearly $28,600 around 6 p.m. EST yesterday, according to CoinDesk data.
Following this upward movement, bitcoin pulled back, trading below $28,300 at the time of this report, additional CoinDesk figures reveal.
When explaining these latest price movements, several analysts emphasized the key role played by a fake news report, in which Cointelegraph's Twitter account stated that the U.S. Securities and Exchange Commission (SEC) had approved an application for an exchange-traded fund (ETF) submitted by global asset manager BlackRock.
However, the market observers also highlighted other factors, as well as their impact on bitcoin's recent price movements.
"Bitcoin was up roughly 4% on the day before the fake news was reported by CoinTelegraph," said Scott Melker, a crypto investor and analyst who is the host of The Wolf Of All Streets Podcast.
"It is clear that the irresponsible fake news report was responsible for the move up and subsequent retrace, but not necessarily for the prior move," he stated.
"That was likely a result of insiders who knew that the move was coming, unfortunately. Or it was a result of a short squeeze," Melker clarified.
Tim Enneking, managing director of Digital Capital Management, also weighed in on the situation.
"While the report you refer to certainly drove the initial move, the timing coincided with the expiration of the SEC’s deadline to appeal the Grayscale decision of earlier this year (and that timing may have been deliberate)," he stated.
"Then the short squeeze took over and drove the classic spike and, in the usual way for short squeezes, almost immediately fell back."
Armando Aguilar, an independent cryptocurrency analyst, also commented on these latest developments, emphasizing that several variables helped drive bitcoin prices higher.
He highlighted a prediction made by James Seyffart, an ETF research analyst for Bloomberg Intelligence, who wrote in a note that "We believe there's a 90% chance of approval by Ark's Jan.10 deadline," referring to the deadline provided for a spot ETF application submitted by investment manager ARK Invest.
Aguilar claimed that the high likelihood that an application for a spot bitcoin ETF will receive approval, "coupled with new institutional products and investments has made BTC slowly climb in price."
Going forward, the cryptocurrency could benefit significantly if the SEC approves an application for a spot bitcoin ETF, according to Andrew Rossow, attorney and founder of AR Media Consulting.
"We’ve seen over the past few years the difficulty in getting the “greenlight” from the SEC, so a report indicating that it has approved a new spot bitcoin application is likely to have a significant effect upon the overall crypto market and whether we are one step closer to mainstream adoption," Rossow stated.
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.