AI Predicts BTC to Drop Sub $30K Following Bitcoin ETF Approval, Regain Momentum After Halving

 Key highlights:

• It looks like Bitcoin is in for some turbulence in the coming months, according to our algorithmic prediction – we could see prices dip below $30k by April before finding their footing in the second part of 2024.
• With its own spot ETF possibly approved in the next few months, traders may rotate money out of BTC and into Ethereum.
• Speaking of the long game, the AI is quite bullish on BTC after its next halving in 2024. It predicts prices could surge over 3.5 times to peak near $150k this November.

Yesterday’s US Securities and Exchange Commission’s (SEC) approval of spot Bitcoin exchange-traded funds (ETFs) was a landmark moment for the cryptocurrency industry. While it signaled growing regulatory acceptance of digital assets, our algorithmic models are forecasting short-term volatility for Bitcoin’s price in the coming months.

The broader context of the Bitcoin ETF approval

Securing the nod from the SEC to launch the first spot Bitcoin ETFs removed a major barrier to entry that had stood in the way of mainstream adoption for over a decade. As BlackRock SEC analyst Eric Balchunas noted, it opens the door for institutional money managing trillions of dollars to start allocating to Bitcoin.

The first-ever spot gold ETF was launched nearly 20 years ago. In the span of the next 5 years, gold price surged by roughly +170%.

Could a similar scenario play out after #ETFbitcoin launches? pic.twitter.com/5suRHYtndE

— CoinCodex (@CoinCodex) January 9, 2024

Given Bitcoin’s similarity to gold, it’s worth observing how gold performed after the ETF launch in the early 2000s. After gold ETFs were approved by the SEC in 2003, investment in those products surged, fueling a rally that saw gold rise over 500% in the following years. A similar surge for Bitcoin cannot be ruled out in the long run as its ETFs remove obstacles for curious institutions and risk-averse private investors.

However, in the near term, AI-powered analytics imply that the upside may be limited. Models developed by CoinCodex are forecasting a drop in Bitcoin’s price below $30,000 by April before a recovery driven by its halving cycle resumes.

BTC price predicted to dip on Ethereum ETF speculation

Bitcoin saw steep gains over the last year while much of the wider crypto market cooled off. That trend could be starting to shift as traders rotate out of the top cryptocurrency by market cap.

Bitcoin miners were actively mitigating risks around the SEC’s decision by sending over 10,000 BTC to exchanges before the approval in anticipation of increased volatility. This indicates that at least some market participants felt the big rally was “priced in” and due for a pullback.

Exchange activity remains significantly elevated with 76.4% of #Bitcoin on-chain volume flowing in/out of Exchanges, just shy of the ATH of 77.4%.

?https://t.co/Tj8a6hOVob pic.twitter.com/2eg8jYdA3q

— glassnode (@glassnode) January 10, 2024

More speculation has now turned to Ethereum and when the SEC may greenlight the first spot Ethereum ETF. Several firms submitted applications throughout 2023, with BlackRock, Ark Invest, and VanEck among the more high-profile entries. Some see SEC approval as likely within the next few months.

Deadlines of ETF approvals.

This may siphon some of the hype away from Bitcoin in the near term. Their AI predicts BTC could trade sideways or even drop below current levels if capital rotations exaggerate typical post-approval price action seen after previous milestone events like ETF launches.

Cryptocurrency AI forecasts a dip to sub-$30K in March

Looking at CoinCodex’s 3-month Bitcoin price prediction, the model is anticipating a decline that could see prices plunge below $30,000 in March before recovering.

Market analysts have pointed to several factors that may contribute to a pullback. First, historically, Bitcoin typically sees at least a short-term dip following parabolic rallies as traders take profits. Second is the hype cooling on Bitcoin ETFs as the novelty wears off. And third is competition from Ether, drawing attention as its own ETF remains a possibility in the months ahead.

The onset of the crypto winter that typically follows bull market peaks is also a risk, though the market cycle remains uncertain. Overall, AI signals this period as one to reduce risk exposure and prepare for potentially increased volatility. Of course, a pullback of this magnitude would still leave BTC prices far above the levels that initiated the latest bull run in 2020.

One-year forecast eyes $149K top after next halving

Shifting perspective to CoinCodex’s 1-year Bitcoin price prediction, a very different picture emerges for late 2024 and 2025. The price model forecasts an upside over this duration that could see Bitcoin top out at above $148,000 in November 2024.

That peak would occur roughly seven months following Bitcoin’s next halving event in April 2024. The coin’s stock-to-flow model, which analyzes its intrinsic scarcity due to fixed issuance, has proven highly predictive, and the halvings typically mark the start of new bullish phases.

Some industry figures like Galaxy Digital’s Mike Novogratz agree this dynamic may underpin years of accumulation and gains ahead as mainstream adoption from institutions drives sustained demand. ETF access could turbocharge inflows as it removes technical barriers for certain portfolio managers.

Of course, forecasts this far in advance carry large margins of error. But they paint an upbeat view of Bitcoin’s trajectory if its halving cycles maintain their influence. The technology may see rising usage while geopolitical tensions and economic instability lend support to its digital gold narrative. For long-term investors, Dollar Cost Averaging during potential pullbacks could prove rewarding if history repeats.

The bottom line: AI maps predicted price fluctuations in the wake of ETF greenlight and upcoming halving

AI predicts choppy waters for Bitcoin in the next 3 months as Ethereum competition and typical post-rally forces weigh. But in the longer term, through 2025, the model is bullish as the next halving cycle once again spikes interest while rising institutional involvement scales Bitcoin to new heights. For most holders, sitting tight and ignoring short-term volatility will likely be the best approach.

You can check out this content to examine the price forecast predicted by AI for Ethereum (ETH), which is expected to remain on the agenda for a while with spot ETF applications. At the same time, AI price predictions for XRP, Arbitrum (ARB), and Filecoin (FIL) can also help you gain long-term insight into the altcoin market trends.