Analyst Predicts Surge in Bitcoin ETF Demand as Prices Decline
Amidst a recent downturn in Bitcoin's price, analyst Ki Young Ju anticipates a potential resurgence in demand for spot Bitcoin ETFs, citing on-chain data and historical trends.
On-chain Cost Basis and Price Threshold:
Young Ju highlights that new BTC whales, particularly ETF buyers, have an on-chain cost basis of around $56,000. He suggests that significant capital influxes into the spot Bitcoin ETF market could occur if BTC reaches this price level, based on historical patterns.
Recent Market Conditions:
Despite recent declines in Bitcoin's price, the spot Bitcoin ETF market has been gloomy, with negative net flows observed in ETFs such as Grayscale's GBTC, BlackRock's IBIT, and Fidelity's FBTC. BitMEX Research data indicates a negative flow for the last four trading sessions.
Price Fluctuations and Correction Predictions:
Bitcoin's price has fluctuated between $62,000 and $68,000 over the past week. Young Ju suggests a plausible decline, with corrections typically seeing a maximum drop of 30%. With BTC's recent peak at $73,750, he forecasts a potential drop to as low as $51,000.
Recent Price Correction and Market Analysis:
Over the past 48 hours, Bitcoin's price dropped by 13% from its new all-time high of $73,835 to briefly trade near $60,000. This correction was attributed to overheated market conditions, labeled a "pre-halving retrace" ahead of the upcoming Bitcoin halving event.
Bull Cycle Perspective and Halving Event Impact:
A report by CryptoQuant suggests that the Bitcoin bull cycle is not over, given the relatively low level of investment flows from new investors and price valuation metrics still below past market tops. The impending Bitcoin halving event, less than 31 days away, according to CoinMarketCap's countdown, is expected to further bolster BTC's price and initiate a parabolic uptrend.
In conclusion, amidst ongoing price fluctuations and market corrections, analyst Ki Young Ju's prediction of increased demand for spot Bitcoin ETFs as prices decline offers insights into potential investor behavior based on historical trends and on-chain data. With the upcoming Bitcoin halving event looming, the cryptocurrency market continues to be subject to speculation and analysis regarding future price movements and investment opportunities.
