Bitcoin gains can ‘leak’, potentially causing a 20% drop.
Now that the long-awaited Bitcoin ETFs have launched, the buzz has faded, and the crypto markets are correcting as analysts predicted. However, Bitcoin's looming gains on major exchanges could cause the digital asset's price to plummet even further.
Not only were analysts right on the post-ETF market rebound, they are now predicting higher Bitcoin usage than the last two.
Binance Royal Flush
On January 15, crypto analyst ‘MartyParty' predicted what Binance called a ‘Royal Flush' before the Bitcoin halving. Binance is one of the largest crypto derivatives exchanges, with a daily volume of around $34 billion.
A breakout to $39,500 has seen it clear all longs since December 4th.
In the year In 2020, before the last half-decline, Bitcoin markets were corrected by 50%, but that was mainly due to the epidemic-black swan phenomenon. However, 30% reversals are also common, and this could send BTC prices to $32,800, eliminating all longs from October.
He added:
“This opens the door for much-needed life-changing new longs and forays into Bitcoin and all altcoins.”
Leveraged outflows are common in crypto markets where over-leveraged trades build on speculation that must be eliminated from the system in order to return to normal trading conditions.
Read more: Where to Trade Bitcoin Futures: A Comprehensive Guide
The analyst noted one difference between this and previous cycles, which is the new spot Bitcoin ETF issuers.
“You don't want Bitcoin to drop below $40k or you can defend the last drain week at $41,500. let's see. When they defend, we see the bull run begin.
Bearish weekly candle?
Colleague analyst “CrediBULL Crypto” closely watched the weekly candle, which is decisively carried. The candle looks bad in isolation, he said, but zooming in reveals a more sinister picture.
“The last time we had this candle, people were saying it was happening at the end of a ‘bump' when it was actually in the middle of a big boom – the same could be said for what we're seeing now.
BTC was trading at $42,700 at press time, following a drop to $41,750 in early trade in Asia.
The asset spent most of the weekend consolidating around this level after cooling to $48,500 from the ETF-led pump last week.
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