- Since the approval of the Bitcoin
ETF last week, the world’s largest cryptocurrency, Bitcoin, has faced selling pressure.
- Sycamore predicts a potential decline for Bitcoin, based on chart patterns, down to the range of $38,000 to $40,000.
- Renowned crypto analyst Ali Martinez shared his views on the current trajectory of Bitcoin, noting a clear adherence to a parallel channel.
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Bitcoin Experiences Decline after Approval of Spot Bitcoin ETFs: How Far Will the Decline Continue?
Bitcoin Price Continues Its Decline
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Since the approval of the Bitcoin ETF last week, the world’s largest cryptocurrency, Bitcoin, has faced selling pressure. It observed the longest losing streak in the past month and recorded four consecutive days of negative closures. Currently, Bitcoin is experiencing a 0.22% decline, trading around $42,660, with a market capitalization of $834 billion.
Following the launch of nearly a dozen ETFs, including major players like BlackRock Inc. and Fidelity Investments, Bitcoin surged to its highest level in two years, surpassing $49,000. However, the subsequent decline appears to align with the expected “buy the rumor, sell the news” response, as indicated by Tony Sycamore. Sycamore predicts a potential decline for Bitcoin, based on chart patterns, down to the range of $38,000 to $40,000.
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According to Eric Balchunas, Senior ETF Analyst at Bloomberg Intelligence, newly launched US spot funds garnered a net inflow of $819 million in the first two days of trading. Notably, BlackRock’s iShares Bitcoin Trust saw an outflow of $500 million, while Fidelity Wise Origin Bitcoin Fund collected $422 million.
On the other hand, the Grayscale Bitcoin Trust, the largest in its category with $26 billion in assets, experienced a significant outflow of $579 million last week after converting to an ETF. Speculation regarding a reasonable discount narrowing due to the fund’s previous closed-end structure and trading at a discount to its underlying assets may have contributed to recent fund outflows.
Bitcoin Price Could Retest $34,000
Renowned crypto analyst Ali Martinez shared his views on Bitcoin’s current trajectory, noting a clear adherence to a parallel channel. Martinez suggests that Bitcoin encountered resistance around $48,000, at the upper limit of this channel. Therefore, the projection indicates a potential retracement for Bitcoin down to $34,000, targeting the lower limit of the channel. Following this retracement, Bitcoin is expected to aim for a retest of the upper limit of the channel in the next upward movement. This analysis provides insight into potential price movements within the identified channel.
Additionally, Martinez highlighted a significant development in the Bitcoin Miners’ Position Index (MPI), which surged to 9.43 on January 12. A high MPI implies that miners are engaging in an unusual amount of Bitcoin movement, potentially indicating a selling trend. Despite the recent correction in Bitcoin price, Martinez points out the potential of miners causing further downward pressure if they engage in additional selling. This perspective underscores the importance of monitoring miner activity as a potential impact on the broader Bitcoin market. However, some Bitcoin enthusiasts view the decline in Bitcoin price as an additional buying opportunity for their $200,000 price targets.