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Bitcoin Price Shock: CryptoQuant Predicts $32,000 Drop Post-ETF Approval Due to ‘Sell The News’ Event

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  • CryptoQuant anticipates a significant Bitcoin price drop to $32,000 following the approval of a Bitcoin ETF.
  • This decline is attributed to a ‘sell the news’ phenomenon, where prices fall post-anticipation of a bullish event.

The realm of Bitcoin is bracing for a tumultuous period as CryptoQuant, a renowned data provider, foresees a drastic price correction of Bitcoin to as low as $32,000 in the aftermath of a spot ETF’s likely approval. This anticipated shift, deemed a ‘sell the news‘ event, has the crypto community on edge, with historical data backing this prediction.

“Sell the news” events are not new in the financial world, often occurring when asset prices surge in anticipation of a positive event, only to plummet soon after it materializes.

Understanding the ‘Sell The News’ Phenomenon

The term ‘sell the news’ captures a common trend in capital markets where prices of assets, including Bitcoin, witness a significant rise leading up to a bullish event, such as the approval of an ETF. However, this enthusiasm often leads to a steep decline post-event. This pattern emerges as savvy traders exploit over-crowded long positions, trapping leveraged investors and compelling them to close their positions or face liquidation as prices reverse.

In a recent tweet, Collin Brown echoed CryptoQuant’s sentiment, highlighting the precarious nature of the current Bitcoin market.

The Mechanics Behind the Prediction

CryptoQuant’s analysis points to a critical factor: short-term Bitcoin holders are currently sitting on unrealized profits of about 30%, a scenario which historically precedes significant price corrections. This phenomenon, coupled with the observation that these holders continue to offload Bitcoin at a profit, signals a potential downturn. Bitcoin rallies typically follow periods of short-term losses, which aren’t currently observed.

Historical Context and Current Market Scenario

Bitcoin’s trajectory has seen similar ‘sell the news’ events in the past. Notably, in 2017, Bitcoin peaked at $20,000 post the CME listing BTC futures and again in 2021, reaching $65,000 following Coinbase’s IPO, only to experience declines afterward. Presently, Bitcoin trades at $42,450, having started the year at $16,000, with a stable daily trading volume of around $80 billion, according to CoinMarketCap data.

This context sets the stage for the anticipated volatility and potential price correction post the ETF approval, marking a critical juncture in Bitcoin’s ever-evolving narrative.

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Nikita Dmitrievich
Nikita Dmitrievichhttps://www.ethnews.com/
Nikita, a young and ambitious crypto investor who has been actively involved in the cryptocurrency world for the past 6 years. With a keen interest in blockchain technology, Nikita has been investing in various cryptocurrencies and has seen significant returns on his investments. He is passionate about educating others on the potential of cryptocurrencies and frequently shares his insights on social media platforms. Nikita believes that cryptocurrencies are the future of finance and is constantly researching new projects to invest in. With his dedication and knowledge, Nikita is quickly becoming a prominent figure in the crypto community. Business Email: info@ethnews.com Phone: +49 160 92211628