Why Bitcoin (BTC) Price May Fall to $32,000 in January 2024

A paradoxical situation is emerging as the crypto market awaits the approval of the Bitcoin ETF in early 2024. Although such an approval would seem to create a level of turbulence for Bitcoin, many experts suggest otherwise.

Their analysis predicts a fall to $32,000 in January 2024, indicating a downward trend in Bitcoin's price.

Bitcoin ETFs and the “sell-news” phenomenon

The well-known analysis firm CryptoQuant stated that the market expects a 90% position probability of the Bitcoin ETF in early January. This optimism, reflected in meetings between 32 ETF issuers and the US Securities and Exchange Commission (SEC), suggests a constructive dialogue. However, it sets the stage for the usual “sell-the-news” phenomenon.

“The chances of the ETF approval being a ‘sell-news' event are increasing as Bitcoin market participants are sitting on high unrealized profits. For example, short-term bitcoin holders are getting a huge unrealized profit margin of 30%, which has historically preceded price corrections,” argued CryptoQuant analysts. .

A recent announcement from Blackrock about seeding its own ETF with $10 million is a sign of bullishness. However, CryptoQuant highlighted the impact of mining behavior. With the recent increase in the price of Bitcoin, miners are making huge unrealized profits and have started to increase their sales activities, which may contribute to the downward pressure.

Read more: How to prepare for a Bitcoin ETF: A step-by-step approach

For these reasons, CryptoQuant predicts that Bitcoin may drop to a minimum of $32,000, which is where the short-term holder's perceived value will be placed.

Cathy Wood and Nick Carter Expect BTC Price to Fall

Cathy Wood, CEO and CIO of ARK Invest, also offered a more nuanced view. She admits there may be a short-term sell-off but remains bullish on Bitcoin's long-term prospects.

“It wouldn't be surprising if we saw selling on the news. This is a description of the event that happens when you have a lot of speculation in the market and when you have a price increase, and especially when fast trading companies sell on the news. “But beyond that, I think it's probably going to be a short-term phenomenon,” Wood said.

Wood also noted the significant impact that even modest institutional investment can have on Bitcoin's price. “There are trillions of dollars worth of assets in Bitcoin,” she argued. Wood's view is based on the scarcity of Bitcoin and the expected inflow of institutional money after the ETF.

Read more: Famous analysts explain why the price of BTC will reach $ 1 million after the confirmation of the Bitcoin ETF

Likewise, Nick Carter, a venture capital partner at Castle Island Ventures, noted that there was a mixed reaction from the market to the approval of the Bitcoin ETF. In keeping with the short-term sell sentiment, he is also optimistic about the medium-term effects.

According to Carter, the ETF opens up new layers of capital, encouraging structural flows beneficial to Bitcoin. He underestimated the impact of the halving event compared to the ETF's ability to attract new investment.

“We even see the phenomenon of news selling here. However, in the medium term, ETFs unlock whole new segments of capital that would otherwise not be able to enter the market and allocate to Bitcoin. So, I think you're going to see positive structural flows for Bitcoin,” Carter emphasized.

Read More: BTC Price Prediction 2024: What Will Happen After Bitcoin ETFs Are Approved?

Ali Martinez, Head of Global News at BeInCrypto, presented a historical perspective on Bitcoin. He said strong BTC performances at the end of the year led to a bearish trend in January. This pattern may show profitability in January 2024. Further, it is in line with other analysts' predictions of a rate cut.