- CryptoQuant predicts a significant Bitcoin price correction to around $32,000 post the likely approval of a spot ETF, signaling a ‘sell the news’ event that has the crypto community anticipating market turbulence.
- Understanding the ‘sell the news’ phenomenon reveals a pattern where asset prices surge before a bullish event, only to sharply decline afterward, trapping leveraged investors and prompting profit-taking by savvy traders.
In a forecast that has the Bitcoin realm on edge, CryptoQuant anticipates a significant price correction for Bitcoin, potentially plummeting to $32,000 following the likely approval of a spot ETF. This projection, termed a ‘sell the news’ event, has historical precedents and the crypto community is bracing for potential turbulence.
The ‘sell the news’ concept revolves around the tendency for asset prices, including Bitcoin, to surge in anticipation of a bullish event, only to decline once the event materializes sharply. This behaviour typically involves over-crowded long positions being exploited by astute traders, leading to profit-taking and triggering liquidation for leveraged investors.
Crypto analyst Collin Brown recently echoed CryptoQuant’s sentiment, emphasizing the precariousness of the current Bitcoin market amidst the looming ETF approval.
📉 According to #CryptoQuant, #BitcoinETF approval might lead to a "sell the news" event, potentially sending #BTC tumbling to $32,000 next month. Hold onto your hats, it's gonna be a bumpy one! 🎢💥 #CryptoQuant #BitcoinETF #CryptoCorrection 📈📉 pic.twitter.com/40cnVSMxTJ
— Marcel Knobloch aka Collin Brown (@CollinBrownXRP) December 29, 2023
Mechanics Behind the Prediction
CryptoQuant’s analysis points to a crucial factor: short-term Bitcoin holders currently sit on unrealized profits of about 30%, historically a precursor to significant price corrections. The observation that these holders continue offloading Bitcoin at a profit indicates a potential downturn. Additionally, the absence of short-term losses, typically preceding Bitcoin rallies, adds weight to this projection.
Past instances like Bitcoin’s peak at $20,000 post the CME listing BTC futures in 2017 and the surge to $65,000 after Coinbase’s IPO in 2021, followed by subsequent declines, echo the ‘sell the news’ trend. Presently, Bitcoin trades at $42,450, showing significant growth from its $16,000 starting value in the year, with a stable daily trading volume of approximately $80 billion.
This historical context sets the stage for anticipated volatility and a potential price correction following the ETF approval, marking a pivotal moment in Bitcoin’s evolving narrative.
