Bitcoin, recently managed to break through the $6,600 resistance after adding $400 in about 20 minutes as scheduled maintenance at derivatives exchange BitMEX triggered a massive short squeeze. The squeeze, some analysts believe, could be an indirect consequence of an upcoming bitcoin ETF decision.

As CryptoGlobe covered, the US Securities and Exchange Commission (SEC) set August 23 as the deadline for its decision on two bitcoin exchange-traded funds (ETFs): the ProShares Bitcoin ETF and the ProShares Short Bitcoin ETF.

A potential crypto ETF has been heavily influencing the market in the last few weeks. Earlier the SEC rejected the Winklevoss twins’ ETF application, a move that saw BTC lose 3.5% of its value.

The regulator’s decision on the ProShares ETFs comes at a time in which BTC shorts came close to an all-time high. As covered interest in shorting bitcoin surged this month, as the flagship cryptocurrency was unable to breach the $6,600 resistance.

As founder Alex Sunnarborg put it:

Unlike the VanEck-SolidX Bitcoin ETF, set to be decided by September 30, the ProShares ETFs are backed by BTC futures contracts, sourcing their liquidity directly from the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE), two regulated exchanges trading BTC futures.

The VanEck-SolidX ETF is set to be backed by actual bitcoin, and to get its liquidity primarily from over-the-counter (OTC) desks, whose volume surpasses that of the regulated exchanges futures contracts, Sunnarborg pointed out.

Taking these factors into account, he added the market is likely expecting the ProShares ETFs to be rejected, and a BTC price fall as a result. Given the short sells’ all-time high, he predicted the short squeeze would come

Although the market expects the rejection of the ProShares ETFs, the VanEck-SolidX ETF decision may see the world’s first bitcoin ETF enter the market as the flagship cryptocurrency is about to see added liquidity in secure, regulated products like Bakkt’s physically settled futures contracts, and Fidelity’s exchange-traded note (ETN).

As other analysts point out, however, a bitcoin ETF may be further than expected as the cryptocurrency’s volatility is detrimental towards its approval. The recent short squeeze saw the cryptocurrency add about $400 in only 20 minutes, and wasn’t an isolated case as in July another squeeze cost short sellers $180 million in a similar time period, in which bitcoin surged $600.

As Krüger put it, even if the market isn’t being manipulated – something the US Department of Justice has launched a criminal probe into – BitMEX’s influence over the market is notable, as it is an unregulated exchange trading over $3 billion worth of crypto every day. As covered, it traded a record $8 billion in 24 hours last month