The reasons for the likely drop in bitcoin in January

Analysts at the online platform CryptoQuant have suggested that the price of the market’s flagship could drop from the current BTC $61,986.03 Bitcoin -0.16% Market capitalization $1.23 trillion VOL. 24 hours $0.49 billion to $ 32,000 amid the launch of spot bitcoin ETFs.

According to experts, the market is pricing in a 90% probability that spot bitcoin ETFs will be approved in early January. This reflects investors' optimism about the instrument, but at the same time creates the preconditions for the classic situation known as «buy on rumors, sell on news.»

«It is increasingly likely that the approval of the ETF will be a catalyst for selling on the news, as market participants have large unrealized profits. For short-term bitcoin holders, it is about 30%, which historically precedes price corrections ,» the company says.

Analysts also drew attention to the impact of miners' behavior. Due to the recent rise in the price of BTC, they have switched back to active selling and can significantly affect the dynamics of the main cryptocurrency. For these reasons, CryptoQuant predicts that bitcoin could fall to $ 32,000, where the realized price of short-term holders is.

Katie Wood, CEO of ARK Invest, also foresees the possibility of a short-term sell-off. However, she remains optimistic about the long-term prospects for bitcoin. «A sell-off on the news would not be a surprise. However, I think it will be a very short-term phenomenon,» Wood said.

Earlier in December, CryptoQuant analysts predicted that BTC would reach $ 160,000 in 2024. «We are confident that the cryptocurrency markets will be extremely positive in 2024 ,» the experts said at the time.