Matrixport Warns of Bitcoin Price Drop
Crypto management firm Matrixport has issued a warning, stating that it predicts a 7% decline for Bitcoin in the next two weeks. This prediction comes as one of its trading signals has turned bearish for the first time since August 2023. The company’s analysts had previously stated that they expect the U.S. Securities and Exchange Commission (SEC) to reject all spot Bitcoin exchange-traded funds (ETFs) in January.
Matrixport Highlights Potential Decline
In a blog post on January 8, Matrixport expressed concerns about the ongoing breakout attempt in the Bitcoin market. The firm mentioned that it expects a potential decline in Bitcoin’s price, casting doubt on the market consensus that the SEC would approve spot Bitcoin ETFs by January 10. Matrixport suggested that smart money could leverage the anticipated approval for profit-taking, leading to a retest of the price range of $36,000 to $38,000.
The report also pointed out a significant decline in Bitcoin’s funding rate on crypto exchanges in January, indicating that the cryptocurrency might be “technically vulnerable.”
SEC Decision on Spot Bitcoin ETFs
The recent warning from Matrixport aligns with their previous skepticism about SEC Chair Gary Gensler potentially approving spot Bitcoin ETFs. The firm indicated that Gensler’s prior comments suggest a reluctance to endorse a spot Bitcoin ETF, which could legitimize BTC as an alternative store of value. This stance drew criticism from Galaxy Digital’s Head of Research, Alex Thorn.
Following Matrixport’s report, Bitcoin experienced a rapid decline to $41,500. The sell-off was attributed to the warning, highlighting the market’s sensitivity to rumors and news.
Hot Take: Market Reaction to Matrixport’s Warning
Matrixport’s warning about a potential Bitcoin price drop has caused a stir in the crypto community. High-profile figures, such as Will Clemente, have attributed the recent sell-off to Matrixport’s prediction. The market’s sensitivity to rumors and news highlights the impact of such warnings. Despite the reaction, Matrixport’s co-founder, Jihan Wu, clarified that the company does not influence its analysts’ reports and was surprised by the widespread response.
The broader crypto community eagerly awaits the SEC’s decision on spot Bitcoin ETFs, as the potential approval could contribute to Bitcoin’s price growth. The positive sentiment surrounding this possibility has already led to Bitcoin surpassing the $45,000 mark in early January for the first time since April 2022.
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