The price of Bitcoin may potentially witness a drop to the $38,000 level, as per the prediction by 10x Research.
The cryptocurrency is currently experiencing a pullback after the official launch of spot ETFs in the United States.
Bitcoin’s value has plummeted by over 5%, bringing it down to $42,600, since the introduction of spot ETFs in the U.S.
This “sell the fact” price action could potentially continue into the upcoming period, based on 10x Research’s scrutiny of Bitcoin’s price trends and technical indicators.
10x Research, under the leadership of Markus Thielen, noted in a client report that “Bitcoin’s RSI divergence signals correction.”
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They anticipate that this pullback could reach its limit near the dynamic support level of $38,000.
A bearish divergence occurs when the prices reach a new high, but momentum indicators such as the relative strength index (RSI) do not follow suit, indicating a possible exhaustion of the upside.
Last week, Bitcoin hit a two-year high above $49,000, unconfirmed by the 14-day RSI, thereby validating the bearish divergence with the subsequent price drop.
Thielen also proposed that the shift of investors from the Grayscale Bitcoin Trust (GBTC), an ETF by Grayscale, to lower-fee options might apply additional pressure on Bitcoin’s price.
Grayscale charges a higher fee of 1.5% compared to other asset managers like BlackRock which charges 0.25%.
GBTC, one of the largest Bitcoin holders with over $27 billion, started trading in 2013 and became redeemable on January 11.
The report further stated, “Investors will first sell before they transfer their BTC exposure to another ETF issuer. This will cause downside pressure for Bitcoin and remain an overhang.”
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