A widely followed cryptocurrency analyst and trader is expressing bearish sentiment on Bitcoin (BTC) over the short term.
The analyst pseudonymously known as The Flow Horse tells his 194,800 followers on the X social media platform that an announcement regarding the approval of a spot Bitcoin exchange-traded fund (ETF) could inject excitement into the market causing the price of BTC to rise initially.
The Flow Horse, however, says that there’s a lack of underlying demand for Bitcoin and the buying activity might be dominated by speculators rather than spot buyers who have actual belief in the value of Bitcoin. According to the pseudonymous analyst, an initial price surge following the ETF announcement could be followed by a sharp correction in the price of Bitcoin.
“There are probably larger washouts coming.”
The Flow Horse also says that bearish price action for Bitcoin could pre-empt the ETF announcement. According to a Bloomberg analyst, the U.S. Securities and Exchange Commission could give a decision regarding the status of the spot Bitcoin ETF applications it has received by January 10th, 2024.
“So, either BTC starts selling into the announcement this week [December 24th – 30th] and then sells even harder post announcement, or we trade flat till then and pop on the announcement and then sell off.
Either way, lower BTC post-ETF approval for a bit before higher again.
Given how bullish the market is and [how] eager to bid, I think you can expect that the first line of defense looks at any dip toward $40,000 as a gift and bids hard again with futures contracts. Expect them to be washed out as well.”
Bitcoin is trading at $42,829 at time of writing.
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