Bitcoin Price Could Experience a Significant 16% Decline, Analyst Predicts, with Price Potentially Dropping to $32,700

Bitcoin’s price has dropped to $38,600, its lowest point since early December, following the launch of spot Bitcoin Exchange-traded funds. The leading cryptocurrency has experienced a 5.4% decrease in the last 24 hours, a drop of over 9% in the weekly charts, and a decline of more than 10% over the past month. The approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission on January 10 led to profit-taking and a “sell-the-news” reaction in the market, further accelerating the decline.

Prominent analyst Ali Chart has highlighted a significant correlation between Bitcoin’s price movements and Fibonacci retracement levels. Based on historical patterns in the last two bull cycles, Bitcoin typically retraced to the 50% Fibonacci level after reaching the 78.6% Fib. Currently, Bitcoin has once again hit the 78.6% Fibonacci retracement level, suggesting a potential correction. If historical patterns hold true, Bitcoin could drop to $32,700, aligning with the 50% Fibonacci retracement level.

One reason for the market drop could be the outflows of money from Grayscale’s Bitcoin Trust (GBTC). JPMorgan’s recent report suggests that this could exert more pressure on Bitcoin prices in the coming weeks. Additionally, cryptocurrency exchange FTX has sold $1 billion worth of GBTC shares, intensifying the selling pressure. The lack of expectation for the US Federal Reserve to lower interest rates anytime soon also makes investors cautious about investing in riskier assets like cryptocurrencies.

Despite these challenges, there is hope with the upcoming Bitcoin halving event in April, which could potentially provide support to the current market scenario.