The cryptocurrency markets have expressed increased levels of volatility this week, which have further extended into today after it was announced that Cboe had withdrawn a proposed rule change that, if it were to be approved by the U.S. Securities and Exchange Commission, would allow for the listing of a Bitcoin Exchange Traded Fund (ETF).

Although the markets dropped slightly on this news, it is important to note that the proposal withdraw is temporary and is due in-part to the ongoing U.S. government shutdown.

Bitcoin Holds Support but Drops Slightly

At the time of writing, Bitcoin (BTC) is trading down 1% at its current price of $3,575. Yesterday, BTC sharply dropped to the low $3,500 region which led to an immediate bounce to highs of $3,620, from which it has dropped slightly.

In an email, Mati Greenspan, the senior market analyst at eToro, said that Bitcoin’s positive reaction to the sharp drop towards $3,500 could signal that the cryptocurrency is beginning to establish a long-term price floor.

“What's exciting about yesterday's move is that the direction was quickly reversed and in the aftermath, we even saw a mini rally. This is a very positive sign and could very well indicate that we're at or nearing bitcoin's price floor,” Greenspan explained.

Although the VanEck-SolidX Bitcoin ETF proposal withdraw did deliver a slight blow to the markets, it does not appear that there was enough selling pressure to push BTC back towards its established support level.

Although Greenspan is feeling cautiously optimistic about Bitcoin’s current price action, David Thomas, the director and co-founder of Global Block – a cryptocurrency brokerage firm – recently told MarketWatch that he sees the markets dipping back towards the low-$3,000 region in the near future.

“An inability of BTC to remain above the 21-day moving average means that a sustained break of the $3,500 level remains high which would then put the December lows of $3,100 firmly back on the map and give the bears back control. Overall feeling within the market is one of positivity for BTC on a medium and long-term view, however, there still seems to be a widely held view that BTC is not out of the woods yet and a retest of the lows is on the cards,” he explained.

Altcoins Closely Follow BTC and Drop Slightly

The overall cryptocurrency markets are closely following Bitcoin’s current price action, and nearly all major altcoins – with the exception of Bitcoin Cash – are trading down.

At the time of writing, Bitcoin Cash (BCH) is the best performing cryptocurrency, as it is trading up 3% at its current price of $132.8. Yesterday, BCH sank to lows of $119 before surging to its current price levels.

Ethereum (ETH) has dropped over 1% today and is currently trading at $117.5. ETH is up slightly from its recent lows of under $115.

XRP is trading down 1.2% at its current price of $0.316.

All the cryptocurrencies mentioned in this article are available to trade on covesting.io