Potential Approval of Bitcoin ETF Could Trigger a Sell-Off
According to a recent report by CryptoQuant, the potential approval of a spot Bitcoin (BTC) ETF could become a “sell the news” event. The report highlights that bitcoin market participants are currently sitting on high unrealized profits, which historically has preceded price corrections. Short-term bitcoin holders are experiencing profit margins of 30%, indicating the possibility of a sell-off. Additionally, bitcoin miners are also experiencing high unrealized profits and increasing selling pressure as prices remain above $40,000.
Potential for a Spot Bitcoin ETF Approval
Bloomberg Intelligence analysts predict a 90% chance of a spot bitcoin ETF approval by the U.S. Securities Exchange Commission (SEC) in Q1 2024. The rise in bitcoin’s price this year has been driven by optimism surrounding potential ETF approvals. Over a dozen firms, including BlackRock and WisdomTree, are awaiting regulatory approval from the SEC.
The current price of bitcoin is $43,119 according to The Block’s Prices Page.
Hot Take: Bitcoin Price Correction Expected Amidst High Unrealized Profits
The potential approval of a spot Bitcoin ETF and the high unrealized profits in the market may trigger a sell-off, leading to a price correction. Short-term holders are experiencing significant profit margins, historically preceding corrections. Miners are also selling their holdings as prices remain above $40,000. Bloomberg Intelligence analysts predict an ETF approval in early 2024, further fueling optimism in the market. However, if a “sell the news” scenario occurs, the bitcoin price could potentially decline to as low as $32,000.
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