Bitcoin Faces Potential Correction to $38,000, Analysts Warn

The divergence between Bitcoin’s price and the RSI indicator may signal risks of further decline towards the dynamic support at $38,000, according to 10x Research, as reported by CoinDesk.

Following the approval of spot Bitcoin ETFs, prices fell by 5% to $42,600, confirming the classic “sell the news” phenomenon, experts noted.

This was preceded by a rise to a two-year high near $49,000, which was not accompanied by a similar trend in the 14-day RSI. The subsequent price drop confirmed bearish divergence, specialists observed.

The MACD histogram fell below zero, indicating a bearish shift in momentum, analysts pointed out.

Experts highlighted the impact on price from capital outflows from GBTC, which charges a 1.5% management fee, to competing instruments with more attractive terms.

“Investors will sell first before transferring their Bitcoin assets to another product issuer. This will exert downward pressure on digital gold. It will remain excessive,” experts explained.

According to Cryptoquant, Grayscale sent 21,400 BTC to various addresses over the past 30 days.

Grayscale sent 21.4k $BTC to multiple addresses, including Coinbase, in the last 30 days. pic.twitter.com/7WK9qV8wa3

— Ki Young Ju (@ki_young_ju) January 13, 2024

Some flows went to Coinbase. The Bitcoin premium observed on Binance in December-January turned negative on this platform after ETF trading began. This indicates sales of the first cryptocurrency by U.S. investors, confirmed by high trading volumes during the American session, experts added.

Data Reveals: Grayscale’s BTC Sold on Coinbase

Data doesn’t lie, as seen once again. CryptoQuant CEO, @ki_young_ju, has shared a chart about the outflow of Bitcoin from the Grayscale Fund. This fund has recently been transformed into an ETF, allowing the outflow of Bitcoin.

The… pic.twitter.com/6eNPMA2vUd

— Maartunn (@JA_Maartun) January 13, 2024

Amid weakening cryptocurrency market conditions, the fear and greed index moved into the neutral zone (52 points). Before the approval of spot ETFs, the indicator reached the level of Extreme Greed, indicating prevailing FOMO sentiment.

Anthony Scaramucci, founder of SkyBridge Capital, agreed with Cryptoquant’s position on Grayscale’s impact on Bitcoin dynamics in an interview with Bloomberg.

The expert referred to observations from the trading department of his hedge fund. According to him, GBTC holders were moving to alternatives with lower fees.

“The second thing we see is the sale of FTX’s competitive mass on ETF news. I expect the excess supply to disappear in the next six to eight trading days. Wall Street has entered a quiet period — they haven’t pushed ETFs to the market. The situation will change in eight days,” the specialist explained.

Back in January, former BitMEX CEO Arthur Hayes warned of a 20-30% Bitcoin correction due to declining dollar liquidity.