The price of Bitcoin (BTC) has been rising since late 2023 in the speculation of a spot Bitcoin Exchange-Traded Fund (ETF). But, on-chain data suggests that a price correction is imminent.
In the past 13 weeks, there have been 11 positive weekly closings and just two negative ones. During this time period, Bitcoin has rallied over 70%, from $27,000 to $47,000.
However, there has been no significant correction so far.
Bitcoin Price Correction Cannot be Ruled Out: CryptoQuant
In anticipation of a spot Bitcoin ETF, various factors indicate increased demand for BTC. According to a CryptoQuant report shared with BeInCrypto, some of these factors are:
- GBTC funds’ price discount narrowed from 50% in January 2023 to 5% in 2024
- Trading volume for Bitcoin’s funds has increased along with the price increase.
- BTC is trading at a premium on Coinbase US due to an increase in the demand for spot Bitcoin in anticipation of ETFs
In contrast, CryptoQuant believes that a correction is due anytime soon.
“As much as Bitcoin demand will certainly gain from the approval of the ETFs, we continue to recognize that several On-chain indicators signal a price correction can’t be ruled out mostly because of a high level of unrealized profits from Bitcoin holders,” CryptoQuant said.
The screenshot below shows that Bitcoin short-term holders’ unrealized profits have increased.
“High unrealized profit margins have preceded price corrections in the past. If prices were to increase further after the ETF approval, it would put Bitcoin at a higher risk of correction,” CryptoQuant explained.
Read more: How To Prepare for a Bitcoin ETF: A Step-by-Step Approach
There is also a potential selling pressure from miners depositing their Bitcoin to centralized exchanges. On Monday, BeInCrypto reported that the mining pool, F2Pool, sent 1,000 BTC to Binance.
CryptoQuant claims that this is the largest daily outflow from F2Pool since August 2023.
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For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.
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Source: https://beincrypto.com/bitcoin-price-drop-miners-sell-btc/