Here’s Why Bitcoin (BTC) Price Might Drop to $32,000 in January 2024 – Parofix

[Kathleen]

Here’s Why Bitcoin (BTC) Price Might Drop to $32,000 in January 2024



A paradoxical scenario is emerging as the crypto market predicts that spot Bitcoin ETFs (exchange-traded funds) will potentially be approved in early 2024. While such confirmation may seem to herald a bullish phase for Bitcoin, some experts suggest otherwise.


Their analysis points to a potential decline in Bitcoin price in January 2024, which is estimated to be around $32,000.


Bitcoin ETFs and the “Selling the News” Phenomenon


CryptoQuant, a well-known analysis firm, stated that the market expects 90% spot Bitcoin ETF approval by the beginning of January. This optimism, reflected in 32 meetings between ETF issuers and the U.S. Securities and Exchange Commission (SEC), suggests constructive dialogue. But it also sets the stage for a classic “news selling” activity.

“As Bitcoin market participants sit on high unrealized profits, the likelihood of the ETF approval being a ‘Sell the News’ event increases. For example, short-term Bitcoin holders experience high unrealized profit margins of 30% that have historically preceded price corrections.”

Bitcoin Realized Price. Source: CryptoQuant


Blackrock’s recent announcement to seed its ETF with $10 million is bullish. Still, CryptoQuant emphasized the impact of miner behavior. With the recent rise in Bitcoin prices, miners are making high unrealized profits and are starting to increase their selling activity, which may contribute to downward pressure.

Read more: How to Prepare for a Bitcoin ETF: A Step-by-Step Approach

For these reasons, CryptoQuant predicted that Bitcoin could fall as low as $32,000; which is where the short-term holder’s price materializes.

Cathie Wood and Nic Carter Wait for BTC Price to Drop


ARK Invest CEO and CIO Cathie Wood also provided a more nuanced perspective. He acknowledged the possibility of a short-term sell-off but remains bullish on Bitcoin’s long-term prospects.

“It wouldn’t be surprising if we saw a sell-off on the news. This is a statement where you have a lot of expectation that a price will rise in the market, the event happens, and then especially swing trading organizations sell on the news. But beyond that, I think it will just be a very short-term phenomenon,” Wood concluded.

Wood also touched on the significant impact that even a modest institutional investment can have on the price of Bitcoin. He argued that “there are trillions of dollars of assets to be allocated” in Bitcoin, and that if these institutions move 0.1%, “it will move the needle.” Wood’s view is based on Bitcoin’s scarcity and the expected influx of institutional funds following ETF approval.

Read more: Prominent Analysts Explain Why BTC Price Will Reach $1 Million After Bitcoin ETF Approval




Similarly, Nic Carter, funding partner at Castle Island Ventures, highlighted a dilemma in the market’s response to the spot Bitcoin ETF approval. While he acknowledges short-term selling sentiment, he is also optimistic about the medium-term effects.

According to Carter, the ETF will unlock new capital classes by encouraging structural flows that will benefit Bitcoin. He downplayed the impact of the halving event compared to the ETF’s potential to attract new investment.

“We may even see a news sales event here. But in the medium term, the ETF unlocks entirely new classes of capital that would otherwise not be able to enter the market and be allocated to Bitcoin. “So I think you will see structural flows that will be positive for Bitcoin,” Carter emphasized.

Read more: BTC Price Prediction 2024: What Will Happen After Bitcoin ETFs Are Approved?


Bitcoin Monthly Returns. Source: CoinGlass


BeInCrypto Global News Manager Ali Martinez offered a historical perspective on Bitcoin. He noted that strong BTC performances towards the end of the year often led to downtrends in January. This model suggests that January 2024 could see an increase in profit taking. It then coincides with other analysts’ price decline predictions.

#Heres #Bitcoin #BTC #Price #Drop #January