Bitcoin Price at Risk: Analysts Warn of Potential Drop to $32,000 Amid ETF Approval
As anticipation builds around the potential approval of spot Bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC), analysts from on-chain platform CryptoQuant caution that this development might not be an unequivocal positive for Bitcoin’s price. Contrary to the prevailing sentiment, there are concerns that the approval could trigger a sell-off, causing Bitcoin to dip to around $32,000.
CryptoQuant notes that the market is pricing in a 90% probability of spot Bitcoin ETF approval in early January. While this reflects investor optimism, it also sets the stage for a classic “buy the rumor, sell the news” scenario.
The analysts at CryptoQuant argue that there’s a growing likelihood of approval acting as a catalyst for news-driven selling. This is due to the substantial unrealized profits held by market participants, particularly short-term Bitcoin holders with roughly a 30% unrealized profit, historically preceding price corrections.
Additionally, the analysts observe the behavior of miners, who have resumed active selling amid Bitcoin’s recent price surge, potentially exerting significant influence on the cryptocurrency’s price dynamics.
Considering these factors, CryptoQuant predicts a potential Bitcoin price drop to $32,000, aligning with the realized price of short-term holders.
Renowned figures like Cathy Wood, CEO of ARK Invest, acknowledge the possibility of short-term sell-offs but remain optimistic about Bitcoin’s long-term prospects. Wood suggests that any sell-off triggered by the news would likely be short-lived.
Nick Carter, Partner at Castle Island Ventures, shares similar sentiments. He believes that the ETF approval will open new capital avenues, stimulating structural flows that would benefit the Bitcoin market. Carter contends that the ETF launch diminishes the significance of events like the halving, emphasizing the transformative potential of institutional funds flowing into Bitcoin after the ETF’s approval.
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