Here Are 3 Reasons Why Bitcoin (BTC) Might Still Fall To $35,000
Bitcoin News Latest News News

Here Are 3 Reasons Why Bitcoin (BTC) Price Might Still Fall To $35,000

  • As per analysis, here are three likely reasons why the price of Bitcoin (BTC) might still fall to $35,000.

BitMEX cofounder Arthur Hayes’s recent activity suggests that he anticipates Bitcoin plummeting below the $40,000 mark, as evidenced by his purchase of put options with a strike price of $35,000 set to expire on March 29. 

His prediction aligns with the technical analysis that showcases Bitcoin’s struggle to maintain its foothold above critical support levels.

The rationale behind this bearish outlook can be dissected into three key factors:

See Also: ORDI Dropped 15% After Bitcoin Plunged Below $40k

U.S. Treasury quarterly refunding announcement

Scheduled for Jan. 31, this event is vital as it may influence the liquidity on financial markets, affecting risk assets such as Bitcoin.

Options market activity

Hayes’s options purchase indicates a strategic bet on Bitcoin’s decline, signaling a lack of confidence in the digital gold’s short-term prospects.

Grayscale’s selling activity

Grayscale has been offloading BTC to reimburse investors exiting the GBTC fund. Previously, GBTC shares were redeemed in USD without selling the underlying BTC, which is no longer the case after the spot ETF approval.

The shift in Grayscale’s operations emerges from two factors:

High management fees: Grayscale’s 1.5% yearly fee is significantly higher than other ETF issuers, prompting investors to seek more cost-efficient alternatives.

GBTC discount closure: Investors who previously purchased GBTC shares at a 40% discount are seizing the opportunity to exit at a break-even point.

The ongoing sell-off by Grayscale is expected to apply downward pressure on Bitcoin’s price in the short term. 

However, this phase is anticipated to be transient, lasting a few weeks as the market adjusts to the redistribution of investments from GBTC to lower-fee ETFs.

See Also: Bitcoin Whales Sold $3 Billion in BTC, Is Another Price Plunge Coming?

While the immediate future may appear bleak for Bitcoin, with the possibility of descending to Hayes’s predicted levels, the fundamental attributes that make Bitcoin a distinctive asset class remain unchanged.

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.