Bitcoin is poised for a substantial pullback, as indicated by technical charts, warns Crypto Banter, a prominent YouTube analyst. Despite the recent approval of spot Bitcoin ETFs on January 10, celebrated as a milestone for the industry after a decade-long application process, Bitcoin prices have continued to decline, dragging much of the market into negative territory.
Crypto Banter emphasizes that success should be reflected in more money flowing into Bitcoin than out of it. However, despite a net inflow of $1.2 billion in the previous week, $579 million flowed out of Grayscale, the world’s largest BTC holder with 619,000 coins. The analyst suggests that previously locked-up coins are now hitting the market in response to the new ETF announcements.
According to the analyst, Grayscale initiated the liquidation of BTC by sending it to multiple addresses on January 12. With numerous sellers looking to exit their positions, Grayscale Bitcoin Trust (GBTC) started trading at a 3% discount. This has led the analyst to predict a race between funds leaving GBTC and entering spot Bitcoin ETFs, likely resulting in a market dump.
Despite this concerning outlook, there is some positive news highlighted by the analyst. Ethereum’s open interest has increased, indicating a shift of some BTC trades to ETH. Institutions are reportedly unwinding their positions, and the question now is whether Bitwise and other providers can attract more BTC buyers.
Analyzing Bitcoin’s technical charts on a weekly timeframe, the analyst points out a shooting star pattern, often signaling a potential market decline. However, the analyst draws parallels to the aftermath of the Coinbase IPO, where Bitcoin experienced a local top followed by a temporary downturn before a subsequent parabolic move. While historical data suggests an imminent pullback, the potential for a rebound remains. At the time of reporting, Bitcoin was valued at $42,271, reflecting a 1% decrease in the last 24 hours.
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