The price of Bitcoin (BTC) has fallen sharply over the past week. As of yesterday, it is below $40,000 for the first time since December 4th. Of course, whether the bottom has been reached is still uncertain, but according to crypto analyst Ali Martinez, a downward trend to $32,700 would not be a surprise. What is this rather painful prediction based on?
The euphoria over the Bitcoin ETF is “unjustified,” says the president of the crypto manager
Bitcoin news
Is things getting worse for BTC?
Shortly after the historic approval of Bitcoin Spot Exchange-traded funds (ETFs), Bitcoin rose to a brief high of just under $49,000, but things have only gone downhill since then.
The mood has completely changed and a downward trend has begun. A low of $38,650 was reached earlier today.
Martinez posted on the social media platform X knowledge that the price movements so far are suspiciously similar to those of the previous two cycles.
In both 2019 and 2016, Bitcoin price rose to the 78.6% Fibonacci level before the halving. Martinez's chart shows that this level corresponds to a price just above $50,000 this time. So it was only a matter of a hair's breadth before the price reached that level again.
In 2019 and 2016, a downtrend occurred after reaching the 78.6% Fibonacci level. In 2019 the price fell below the 50% Fibonacci level and in 2016 it narrowly missed it.
The 50% Fibonacci level is now at $32,700. This would represent a further 15.5 percent decline from the current price of $38,700.
Bitcoin ETFs: Sell the News
The price has already suffered a decline of more than 21 percent from the high of $48,975, reached a day after the mass approval of Bitcoin spot ETFs.
The dreaded sell the newsEffect is one of the causes. Ahead of the long-awaited arrival of BTC exchange funds, the price skyrocketed, but after the actual approval, the hype logically disappeared and many investors dumped their previously purchased Bitcoins onto the market.
Another reason is the strong selling pressure from the Grayscale fund (GBTC), which was converted into a spot ETF with the approval. Grayscale's total BTC holdings have fallen from 619,000 to 537,000 bitcoins since the switch.
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