Crypto News: SEC Decision Against Appealing the Grayscale Ruling Delivers a BTC Boost

Key Insights:

• Former BlockFi CEO Zac Prince gave testimony in the Sam Bankman-Fried trial.
• SEC decided against appealing the court ruling in favor of Grayscale.
• BTC makes gains on the Grayscale news but remains in a bear trap.

Former BlockFi CEO Gave Testimony in the Sam Bankman-Fried Trial

On Friday, former BlockFi CEO Zac Prince gave testimony at the Sam Bankman-Fried trial. As a witness for the prosecution, Zac Prince addressed questions relating to loans given to FTX and Alameda Research.

BlockFi initially lent out $10 million. In the second quarter of 2021, the amount increased from $50 million to $1.1 billion. Prince then discussed the LUNA ecosystem blow-up and the Three Arrows Capital default.

The prosecution then questioned Prince about Alameda’s balance sheet for Q2 2022. Asked if BlockFi spoke to Alameda about the financials, Zac Prince confirmed they spoke with Caroline Ellison and one other.

The prosecution then asked if BlockFi would have extended loans to Alameda had they known about the FTX-Alameda loans.

Zac Prince replied, “No, they would have been insolvent.”

The prosecution then asked if BlockFi would have lent money if they had known Alameda was using FTX customer money.

Zac Prince responded, “No. That is not appropriate.”

The prosecution also asked about the collateral pledged to BlockFi and the total exposure before wrapping up, by asking why BlockFi declared bankruptcy.

Zac Prince answered, “Alameda and FTX.”

Cross-examination was short and focused on the internal process for approving loans to FTX and Alameda. SBF’s defense counsel wrapped up cross asking if Zac Prince was concerned BlockFi might go bankrupt.

Zac Prince replied, “A CEO must think of possibilities.

SEC Decides Against Appealing the Grayscale Bitcoin ETF Ruling

On Saturday, news hit the wires of the SEC deciding against appealing the court ruling on the Grayscale Bitcoin ETF.

In August 2023, Grayscale won its case against the SEC on appeal. The court ruled the SEC must reconsider its decision to decline the Grayscale application to convert the Grayscale Bitcoin Trust into the first Bitcoin-Spot ETF. In October, Grayscale filed a request to convert the Grayscale Ethereum Trust to an ETF.

Technical Analysis

Bitcoin Analysis

BTC remained below the 50-day and 200-day EMAs, affirming bearish price signals. Significantly, the 50-day EMA narrowed to the 200-day EMA. A bearish cross of the 50-day EMA through the 200-day EMA would reaffirm the near-term bullish trend reversal.

A BTC break below the $26,755 support level would give the bears a run at the trend line. SEC scrutiny of the digital asset space and adverse news relating to the SEC cases against Coinbase and Ripple would affect buyer appetite.

However, a return to $27,000 would support a break above the EMAs and bring $28,000 into view. Favorable crypto-spot-related news would fuel buyer demand.

The 14-Daily RSI reading of 46.95 indicates a BTC fall to the trend line before entering oversold territory.

Ethereum Analysis

ETH sat below the 50-day and 200-day EMAs, sending bearish price signals.

An ETH return to $1,600 would support a move to the $1,626 resistance level. Near-term trends hinge on progress toward an ETH-spot ETF market.

However, a fall through the $1,502 support level would give the bears a run at $1,450.

The 14-Daily RSI reading of 38.80 suggests an ETH break below the $1,502 support level before entering oversold territory.