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7 Cryptos Pop Higher on ‘Fake News’ That Could Turn True

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  • Bitcoin (BTC-USD): Reacted to a false report about a spot BTC ETF approval and the sustainability of its sentiment spike is in question.
  • Ethereum (ETH-USD): Despite Bitcoin’s rally, it showed only modest gains and remains vulnerable beneath key resistance levels.
  • Tether (USDT-USD): Its slight rise from its dollar peg suggests that the crypto market may have already priced in positive news.
  • Read more about these top cryptos to watch!
cryptos - 7 Cryptos Pop Higher on ‘Fake News’ That Could Turn True

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After a frustrating lull in the cryptocurrency market that began earlier this summer, a fake news story reinvigorated sentiment across multiple individual cryptos. While the report quickly became an embarrassing fiasco – possibly motivated by the desire to jump the gun to attract maximum viewership – the narrative could eventually turn true. Still, this ugly situation may add a new wrinkle to virtual currency regulation.

According to a hastily posted and subsequently edited and deleted social media post, Cointelegraph published a rumor that the U.S. Securities and Exchange Commission (SEC) approved a bid by BlackRock (NYSE:BLK) to launch a spot crypto exchange-traded fund (ETF). There was just one problem: a BlackRock spokesperson stated that the US SEC was still reviewing the application.

However, prior to Cointelegraph retracting and apologizing for the erroneous post, several cryptos had skyrocketed on the fake news item. With positions being forcibly liquidated (both shorts and longs) due to the whipsaw action, many understandably cried foul. It doesn’t matter that there’s a real chance the SEC could approve a spot crypt ETF. Manipulation is manipulation.

Given the ordeal, blockchain critics have even more ammunition. With that, here are the cryptos to watch on an eventful start to the week.

Bitcoin (BTC-USD)

Up trend Technical graph of Bitcoin (BTC-USD) in futuristic concept, BITI ETF is a Bitcoin short fund for investors betting against Bitcoin.
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Easily commanding the spotlight among cryptos, Bitcoin (BTC-USD) briefly hit the $30,000 level on the aforementioned fake news report about an SEC approval over a spot BTC ETF. On Monday, Cointelegraph clarified the situation, stating that the company’s social media team posted a message – without prior editorial approval – that the SEC approved BlackRock’s iShares spot Bitcoin fund.

It’s important to note that the false news stemmed from a post rather than a full-blown article. Nevertheless, Cointelegraph apologized to its readers and the impact that the inaccurate rumor caused. Further, the company will thoroughly audit and review its social media management processes. Also, it will make “all necessary structural changes.” Just my opinion, that sounds like pink slips may be distributed.

Moving forward, it remains to be seen whether the sentiment spike will be sustainable or not. While BTC poked its head above its 200-day moving average, the overall volume levels (not counting Monday’s surge) have been declining. No doubt, the blown positions left many investors on both sides of the trade salty.

Ethereum (ETH-USD)

Etereum coin is in pocket. Ethereum is a decentralized, open-source blockchain with smart contract functionality. ETH crypto
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One factor that might make investors hesitant to jump aboard cryptos broadly thanks to Bitcoin’s swing higher is Ethereum (ETH-USD). Specifically, it only saw a modest gain, less than 2% up in the trailing 24 hours. Moreover, during the past one-week period, ETH only printed a margin gain. At the time of writing, the number two coin by market capitalization sits conspicuously below the $1,600 level.

Per Stockcharts.com, Ethereum managed to briefly breach its 50 DMA (at $1,621) and peak just under $1,650 on Monday. However, once the fake news story was exposed, ETH quickly gave up its gains. What’s more, the volume surge catalyzed by the false rumor wasn’t really that impressive compared to levels seen earlier this year. Thus, for alternative cryptos or altcoins, sentiment may have faded.

Looking ahead, Ethereum bulls really need to push the price toward the $1,700 level. From there, a march toward the $1,800 milestone would imply a possible trend reversal. If not, ETH looks vulnerable to the downside.

Tether (USDT-USD)

Image of four tehter coins
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With Tether (USDT-USD) being a stablecoin – or blockchain asset pegged to a hard currency, usually the dollar – it doesn’t follow the capital gains curve that’s common with most other cryptos. Nevertheless, the USDT coin moved higher against its peg to the greenback. In other words, ever so slightly, one USDT was worth more than a buck. Still, investors will want to be cautious about excessive exposure.

Primarily, a transition appears to be occurring with net volume sentiment. Stated differently, in the first half of October, large transactions mostly aligned with bullish acquisitions as opposed to bearish divestitures. However, in the early morning hours of the Oct. 17 session, divesting volume dominates the overall framework. Now, that could change as the session wears on. Still, it’s an interesting dynamic.

Basically, it’s possible that whatever good news is available for virtual currencies is already baked into the digital asset market. Sensing more risk than reward, investors may be rotating out of USDT into safer ideas. If so, prospective buyers will want to exercise caution.

XRP (XRP-USD)

Concept coin for XRP (XRP).
Source: Shutterstock

Another lesson about not overreacting to news and rumors impacting cryptos comes courtesy of XRP (XRP-USD). When the SEC first accused XRP founder Ripple Labs of securities violations, the action sparked a sharp drop in the digital currency’s market value. However, as Ripple battled the regulatory agency, many advocates pointed out that if the company could successfully fight back, XRP may enjoy legal precedence.

For a brief moment, that’s exactly what happened. On July 13, XRP “opened” the session at around 47 cents. At the intraday peak, the coin hit 93 cents. However, following some back-and-forth between the bulls and bears, XRP began fading, then dropping. At the time of writing, XRP trades hands for around 49 cents. Basically, it has come full circle despite promising legal wins.

Even worse, XRP has a dogfight ahead of it. With its 50 DMA (at 51 cents) and 200 DMA (at 53 cents) now acting as upside resistance, XRP must first overcome these roadblocks before taking on higher-level targets at 55 and 60 cents.

Solana (SOL-USD)

Solana Coin (SOL-USD) in front of the Solana logo. Solana price predictions.
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While all the cryptos in the top 10 by market cap enjoyed at least some upside in the past 24 hours, none held a candle to Solana (SOL-USD). During the aforementioned timeframe, SOL gained nearly 9% of equity value. In the past one-week period, it’s up at exactly 9%, meaning that SOL has been making steady progress higher.

Moreover, SOL – priced at a bit over $24 – stands clear above its 50 and 200 DMAs. That’s significant because the 200 DMA comes in at a little over $21. Coincidentally, this price point corresponds to a long-term horizontal support line that’s been in place since January of this year. It also acted as support throughout the late spring and early summer of 2021.

With a floor seemingly established, Solana seems to have credibility. Of course, nothing is truly certain with cryptos. Nevertheless, if you want to take a speculative shot with blockchain assets, SOL gives you considerable confidence at this juncture.

Stacks (STX-USD)

A digital representation of the Stacks (STX) crypto.
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For investors wanting to take potshots in cryptos, Stacks (STX-USD) could offer an interesting proposition. Billed as a Bitcoin layer for smart contracts, Stacks enables smart contracts and decentralized applications (DApps) to use BTC as an asset and settle transactions on the Bitcoin blockchain. Per CoinMarketCap’s description, the Stacks layer unlocks $500 billion in BTC capital through the settlement process.

Further, Stacks represents a secured network. For example, all blocks associated with this network are secured by 100% Bitcoin hash power. Further, CoinMarketCap points out that for an attacker to re-order Stacks blocks and/or transactions, the nefarious actor would have to reorganize Bitcoin, which just isn’t going to happen.

What makes STX exciting from a speculation standpoint is that it may have printed a bottom in late 2022/early 2023. From there, STX may be charting a pattern of higher lows. Of course, that’s a major assumption. And we’re also talking about an asset that trades at only 53 cents. Still, if you have some pocket change, STX might be tempting.

Render (RNDR-USD)

The Render (RNDR) crypto logo displayed on a smartphone screen.
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Another speculative idea to add to the fold of high-stakes cryptos is Render (RNDR-USD). At the moment, Render is ranked number 49 in terms of market capitalization, tipping the scales at $696.3 million. In the past 24 hours, RNDR gained more than 6% of market value. In the trailing seven days, the token swung up almost 10%.

According to CoinMarketCap, the underlying Render network is a distributed graphics processing unit (GPU) rendering network built on top of the Ethereum blockchain. Fundamentally, the project aims to connect artists and studios in need of GPU computing power with mining partners willing to rent out spare capacity. Because GPU rendering consumes so much bandwidth, there could be real demand for Render’s services.

As with any other speculative cryptocurrency, though, you’re going to want to exercise caution with RNDR. Though it’s up significantly over the trailing one-year period, it’s also vulnerable to wildly choppy action. Also, as a lesser-known entity, any news item could quickly spike – or collapse – RNDR’s price.

On the date of publication, Josh Enomoto held a LONG position in BTC, ETH, USDT, and XRP. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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