Bitcoin's Price Could Drop to $32,000 in January, Experts Warn
Date: 2024-01-02 Author: Dima Zakharov Categories: BLOCKCHAIN
Bitcoin's Price May Plummet to $32,000
In January, there's a growing concern among cryptocurrency enthusiasts as analysts at CryptoQuant warn of a potential sharp decline in Bitcoin's price. Despite the general optimism surrounding the approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission, CryptoQuant experts believe that this event could have a negative impact.
Approval of Bitcoin ETFs Sparks Selling Frenzy
CryptoQuant has indicated that the market is currently 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 market phenomenon known as "buy the rumor, sell the news."
The company states, "The probability of ETF approval becoming a news catalyst for selling is increasing, as market participants have substantial unrealized profits. Short-term Bitcoin holders have approximately a 30% unrealized profit, historically preceding price corrections."
Miners' Behavior Adds to Concerns
CryptoQuant analysts also draw attention to the behavior of miners. Following the recent surge in Bitcoin's price, miners have resumed active selling, which could significantly influence the cryptocurrency's price dynamics.
As a result, CryptoQuant predicts that Bitcoin could drop to $32,000, which aligns with the realized price of short-term holders.
Mixed Sentiments from Experts
Renowned figures in the cryptocurrency space like Kathy Wood, the CEO of ARK Invest, also anticipate short-term selling. However, Wood remains optimistic about Bitcoin's long-term prospects, stating that the sell-off would likely be short-lived.
She notes, "Selling on the news won't come as a surprise. However, I believe it will be a very short-term phenomenon."
Furthermore, Wood emphasizes the significant impact that even modest institutional investments can have on Bitcoin's price. She cites the BTC supply shortage and the expected influx of institutional funds after ETF approval as reasons for her positive outlook.
Nick Carter, a Partner at Castle Island Ventures, shares Kathy Wood's sentiments. He believes that ETFs will open up new capital flows, benefiting the Bitcoin market, and views the ETF launch as a game-changer, overshadowing even the significance of the halving event.
