A Crypto Analyst Predicts Larger Washouts for Bitcoin
A well-known cryptocurrency analyst, known as The Flow Horse, is expressing bearish sentiment towards Bitcoin in the short term. The analyst believes that the approval of a spot Bitcoin exchange-traded fund (ETF) could initially cause the price of BTC to rise due to market excitement. However, The Flow Horse points out that there is a lack of underlying demand for Bitcoin, and speculators may dominate the buying activity instead of genuine spot buyers who believe in the value of Bitcoin. As a result, the analyst predicts that a significant price correction could follow the initial surge.
The Flow Horse also suggests that bearish price action for Bitcoin could precede the ETF announcement. According to a Bloomberg analyst, the U.S. Securities and Exchange Commission may make a decision on spot Bitcoin ETF applications by January 10th, 2024. Regardless of when the approval happens, The Flow Horse expects lower BTC prices before an eventual recovery.
Hot Take: Brace Yourself for Larger Washouts
The Flow Horse’s bearish outlook on Bitcoin warns investors to prepare for larger washouts in the market. While an ETF approval may initially drive up prices, the lack of underlying demand and dominance of speculators could lead to a sharp correction. This prediction aligns with the belief that a dip towards $40,000 will be seen as an opportunity by bullish investors who will bid hard with futures contracts. However, these investors are also likely to be washed out eventually. As Bitcoin continues to trade around $42,829, it remains uncertain how these dynamics will play out in the coming weeks.
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