Bitcoin on the verge of experiencing a substantial decline, predicts analyst.
Crypto Banter, a YouTube analyst, has predicted a forthcoming decline in the Bitcoin market based on technical charts. Despite the recent approval of spot Bitcoin ETFs, which was considered a victory for the industry after a decade-long wait, Bitcoin prices continue to drop, dragging the majority of the market into the red.
According to the analyst, the success of Bitcoin should be measured by the amount of money flowing into it rather than out of it. However, recent data shows that while there was a net inflow of $1.2 billion in the previous week, Grayscale, the largest holder of BTC in the world, saw $579 million flow out of their holdings, which amounts to 619,000 coins.
The analyst believes that these coins have been locked up for a while, but with the announcement of new ETFs, they are now starting to enter the market. Grayscale has been sending BTC to multiple addresses since January 12 in order to liquidate the cryptocurrency. This influx of sellers trying to exit their positions has caused GBTC to trade at a 3% discount.
The analyst concludes that there is now a race between the amount of money flowing out of GBTC and into spot Bitcoin ETFs, and it is likely that there will be a market dump. On a positive note, the analyst highlights that Ethereum’s open interest has increased, indicating that some Bitcoin trade has moved to Ethereum. The question now is whether Bitwise and other providers can attract more BTC buyers.
When analyzing Bitcoin’s technical charts on a weekly time frame, the analyst identifies a shooting star pattern, which typically indicates a potential fall in the market. However, the analyst compares this chart to the aftermath of the Coinbase IPO, where Bitcoin experienced a local top followed by a drop before going parabolic. Therefore, historically, some pullback would be expected before any major upward movement.
Currently, Bitcoin is trading at $42,271, representing a 1% decrease in the last 24 hours.
