Bitcoin (BTC) has taken a tumble, dropping over 5% since the splashy U.S. debut of spot ETFs last Thursday. This decline, analysts say, might be just the beginning of a deeper pullback, with some predicting a potential dive to $38,000.
Technical Indicators Flash Bearish Signals
10x Research, a leading crypto analysis firm, points to several technical indicators suggesting a correction is in the cards. The Relative Strength Index (RSI), a measure of momentum, diverged from the recent price surge, failing to confirm the rally. This “bearish divergence” indicates potential upside exhaustion.
Furthermore, the Moving Average Convergence Divergence (MACD) histogram, which gauges trend strength, has dipped below zero, signaling a shift towards bearish momentum.
Grayscale Factor: A Potential Headwind
Markus Thielen, head of research at 10x, believes investors switching out of Grayscale’s Bitcoin Trust (GBTC) for cheaper alternatives could further weigh on the price. GBTC, one of the largest bitcoin holders, charges a hefty 1.5% annual fee, while competitors like BlackRock offer significantly lower fees (0.25%).
Thielen argues that Grayscale’s high fees and recent controversies surrounding its parent company, Digital Currency Group (DCG), could prompt investors to seek greener pastures. He highlights the trust’s past trading at a 50% discount to its net asset value, essentially overcharging GBTC holders.
What’s Next for Bitcoin?
While a deeper pullback to $38,000 is a possibility, the market remains highly volatile, and predicting its future with certainty is always challenging. Some analysts believe the recent dip might be a temporary correction before the uptrend resumes.
Investors should closely monitor technical indicators and news developments to make informed decisions. Diversification and a long-term perspective are crucial when navigating the ever-changing landscape of the cryptocurrency market.
