Here Is Why Some Crypto Bigwigs Believe That Bitcoin Will Continue To Fall Through January 2024

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The extravagantly hyped launch of some of the first spot Bitcoin ETFs in the US proved to be the nth iteration of the famous market-based adage: buy the rumor and sell the news. In fact, we had highlighted the utility of moving toward Ethereum in an auxiliary post at the time. Now, as Bitcoin seems poised to lose the $40,000 price level, some crypto bigwigs believe that the ongoing bout of weakness will last till the end of January 2024.

In the immediate aftermath of the launch of spot Bitcoin ETFs in the US, the apex cryptocurrency had made a run toward the $49,000 price level. However, since then, Bitcoin has been firmly glued to the downward escalator. Many theories emerged to explain this confounding weakness. Some pointed to the veritable flood of redemptions emanating from Grayscale Bitcoin Trust (GBTC) spot ETF now that its unit holders are no longer bogged down by the trust’s outflow barriers. Others laid the blame squarely on South Korean and Asian traders, who’ve been buying up BTC aggressively over the past few months in anticipation of the launch of spot Bitcoin ETFs and might now have dabbled in some profit-taking activity. Of these, the former appears more plausible.

Consider the fact that total outflows from GBTC have now reached $2.8 billion.

As per the tabulation by Arkham Intelligence, Grayscale Bitcoin Trust ETF continues to face mounting redemption requests.

Against this backdrop, BitMEX’s co-founder, Arthur Hayes, has now postulated that Bitcoin will likely fall below the $40,000 price level and that the ongoing correction will persist through January. Hayes believes that Bitcoin will remain under pressure until the US Treasury’s quarterly funding announcement, currently scheduled for the 31st of January.

Meanwhile, it appears that FTX had something to do with the persistent outflows from GBTC, with the estate of the defunct crypto exchange purportedly responsible for redemptions of around 22 million units, equating to roughly $1 billion in outflows. Do note that FTX seems to have liquidated the entirety of its GBTC holdings. Consequently, with this persistent source of outflows now exhausted, Bitcoin enthusiasts can finally prepare for the upward thrust that is quite likely to materialize in the runup to the cryptocurrency’s next halving event in April 2024, when the reward for mining Bitcoin will again be cut in half in what is a regular 4-year cycle.

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