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According to 10x Research, the value of Bitcoin may potentially decline to the $38,000 mark.
The cryptocurrency is currently undergoing a retracement following the official introduction of spot ETFs in the United States.
Since the launch of spot ETFs in the U.S., Bitcoin’s price has dropped by more than 5%, now sitting at $42,600.
This “sell the fact” price movement may persist in the forthcoming period, as suggested by 10x Research’s analysis of Bitcoin’s price patterns and technical signals.
Under Markus Thielen’s direction, 10x Research mentioned in a report to clients that “Bitcoin’s RSI divergence indicates a correction.”
See Also: Bitcoin Short-Term Holders Panic-sold $5B BTC After Price Dropped Toward $40,000
They expect this pullback to approach its threshold near the dynamic support level of $38,000.
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A bearish divergence is identified when prices reach a new peak, yet momentum indicators such as the relative strength index (RSI) do not align, signaling a potential waning of upward momentum.
Last week, Bitcoin reached a two-year high exceeding $49,000, which was not confirmed by the 14-day RSI, thereby reinforcing the bearish divergence with the subsequent decline in price.
Thielen also suggested that the migration of investors from the Grayscale Bitcoin Trust (GBTC), an ETF managed by Grayscale, to lower-fee alternatives might exert additional downward pressure on Bitcoin’s value.
Grayscale imposes a higher fee of 1.5% as compared to other asset managers like BlackRock, which charges 0.25%.
GBTC, one of the largest Bitcoin holders with over $27 billion, commenced trading in 2013 and became redeemable on January 11.
The report further indicated, “Investors will likely sell first before reallocating their BTC exposure to another ETF issuer. This will create downward pressure on Bitcoin and remain a persistent concern.”
Disclaimer: The information presented is not intended as trading advice. Bitcoinworld.co.in assumes no responsibility for any investments made based on the information provided on this page. We highly recommend conducting independent research and/or seeking advice from a qualified professional prior to making any investment decisions.
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