King of cryptocurrency Bitcoin BTC/USD has had a stunning bull run in 2023. Anticipating approval for Bitcoin ETF, the cryptocurrency’s market capitalization has surged 164% in 2023 so far, which is an increase of $539 billion.
Now, a leading cryptocurrency trader thinks there is a possibility of a considerable drop in Bitcoin value.
What Happened: Renowned cryptocurrency expert DonAlt asserts that the sanctioning of a spot-based Bitcoin ETF could result in heightened Bitcoin price fluctuations.
DonAlt anticipates that Bitcoin might briefly rally following the ETF news, but a significant correction would ensue.
“I think the news is going to be a sell-the-news event. You might just wick, like maybe we wick to the upside on the ETF announcement toward $45,000, $46,000, $47,000 maybe $48,000 something like that,” he said.
“Then I could see a 10%, 20% or 30% weekly wick to the downside,” he added, saying that the Bitcoin ETF approval could actually be a “sell-the-news” event.
Despite predicting a sharp dip after the ETF approval, DonAlt maintains that the entities backing the ETFs could drive Bitcoin’s subsequent ascent.
He argued that major firms such as BlackRock Inc. BLK wouldn’t let the cryptocurrency fade post-ETF announcement and might acquire Bitcoin in bulk to prevent it from becoming a “complete joke.”
Why It Matters: The potential approval of Bitcoin ETFs has been a hot topic in the crypto community recently.
The remarkable 160% surge in Bitcoin’s market capitalization in 2023 was fuelled by investor optimism around this possibility. The decision, expected by Jan. 10, might trigger a “demand shock” in the market, according to MicroStrategy co-founder Michael Saylor.
The long-awaited launch of the spot Bitcoin ETF is nearing, stirring significant anticipation and strategic planning in the cryptocurrency market.
Considering these factors, the predicted correction post-ETF approval could be a pivotal event in the cryptocurrency market, potentially impacting Bitcoin’s future trajectory.
Price Action: At the time of writing, BTC was trading at $43,616.73, up 0.05% in the last 24 hours, according to Benzinga Pro.
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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