Bitcoin (BTC) has slid back to the $26,000 price level, where it was before a U.S. court ruled in favor of digital asset management company Grayscale Investments in its lawsuit against the Securities and Exchange Commission (SEC).

Crypto analytics firm Santiment noted that on-chain data shows that the digital asset has retraced its steps after plenty of push and pull by news of the Grayscale win.

BTC Declines After Grayscale Win

On Tuesday, the U.S. Court of Appeals for the D.C. Circuit overturned the SEC’s rejection to review Grayscale’s application to turn its flagship fund into a spot Bitcoin exchange-traded fund (ETF). The ruling ordered the securities regulator to vacate its decision to reject the asset manager’s application.

Recall that Grayscale filed an application with the SEC to turn its Grayscale Bitcoin Trust fund (GBTC) into a spot Bitcoin ETF in October 2021. After multiple delays, the SEC rejected the application in June 2022 because the company failed to disclose how it would prevent market manipulation practices. Shortly after the rejection, Grayscale sued the agency.

While ruling in favor of Grayscale, the court lambasted the Commission’s unreasonable justification for favoring futures ETFs over spot products. The SEC was also blasted for failing to provide adequate evidence for its claims.

As Grayscale’s CEO announced the court’s decision on X, the news positively impacted BTC, pushing its price by more than $2,000 in hours to a new multi-week high of over $28,000. Before the news went viral, BTC had been trading sideways around $26,000.

Since the euphoria of Grayscale’s win has died down, the digital asset has returned to the $26,000 level and, at writing time, was trading at $25,900.

Traders Brace for More Volatility

Notably, Santiment mentioned in an earlier tweet that crypto whales and sharks may have known “a thing or two” about the Grayscale win before it was announce