10xResearch Reveals Potential Bottom Prices for Bitcoin: How Far Will the Price Drop?
Bitcoin, a leading cryptocurrency, has always been a key indicator of market trends and investor sentiment. Recent developments surrounding Bitcoin Exchange-Traded Funds (ETFs) in the United States have had a significant impact on Bitcoin’s price. 10x Research, a renowned research firm for crypto traders, has been closely monitoring these changes and providing valuable insights into the current market dynamics.
In their note titled “How should traders position themselves in the uncertain ETF approval period,” released on December 29th, 10x Research highlighted a significant triangle pattern in Bitcoin’s price chart. This pattern typically predicts a movement of around 10% in either direction. Following the breakout of this pattern, Bitcoin experienced a rally. However, it is important to note that such patterns often suggest a retrace back to the breakout point, which in this case is approximately $44,000.
On the inaugural trading day of the first Bitcoin ETF in the U.S., Bitcoin reached a price of $48,500. This level aligns with the breakout projection of the triangle pattern and also represents the average price level for investors over the past 2-3 years. It is often seen as a resistance point. This milestone marks a significant moment in Bitcoin’s journey and reflects the high expectations of investor inflow.
Bitcoin’s history has shown significant price retracements after major events, such as the launch of Bitcoin Futures in December 2017, the Coinbase listing in April 2021, and the launch of the Bitcoin ETF based on Futures in October 2021. These instances indicate potential market fatigue that may follow significant developments.
Based on 10x Research’s analysis of Bitcoin’s price patterns and technical indicators, there is a potential for a pullback. The recent decline of the currency to $42,600 after the ETF debut can be seen as a classic “sell the fact” reaction. The Relative Strength Index (RSI) divergence, in particular, indicates a correction, with a potential bottoming out near the dynamic support level of $38,000.
A bearish divergence occurs when the price reaches a new high while momentum indicators like the RSI do not, suggesting a potential exhaustion in the upward trend. The fact that Bitcoin failed to sustain its two-year high above $49,000, without confirmation from the 14-day RSI, further supports this divergence.
Grayscale’s ETF, the Grayscale Bitcoin Trust (GBTC), holds a significant position in the market, with a coin stash worth over $27 billion. The shift of investors from Grayscale’s higher-fee ETF to other low-fee options is expected to exert downward pressure on Bitcoin prices. Recent negative news surrounding Grayscale and its parent company DCG, particularly regarding their management fees, may also impact investor sentiment and market dynamics.
In conclusion, the developments surrounding Bitcoin ETFs in the United States have had a notable impact on Bitcoin’s price. 10x Research’s analysis suggests a potential pullback, while the role of Grayscale’s ETF and market dynamics add further complexity to the situation.