- BTC has fallen by over 7% in the past 24 hours.
- Selling sentiment was dominant in the market and indicators looked bearish.
After the recent one Bitcoin [BTC] ETF approvals created excitement throughout the crypto community as many expected a bull rally. On the ground, however, things turned out to be very different.
Instead of a bull rally, BTC prices witnessed a massive correction, pushing its value back below $43,000.
Therefore, AMBCrypto planned to conduct a thorough check on the health of the king of crypto to understand what caused these cuts and if there were any chances of a trend reversal.
The Aftermath of Bitcoin ETF Approval
As AMBCrypto reported previously, the SEC approved the long-awaited spot ETFs. The approval increased investors’ expectations towards BTC. Shortly after approval BTC‘s trading volume increased.
Santiment’s recent tweet showed that Bitcoin is still trading and moving at predictably high prices, while trading volume recently spiked to its highest level since the FTX crash 15 months ago.
???? #Bitcoin is still trading and moving at predictably high prices after the approval of 11 Wednesday #ETF‘S. Trading volume recently spiked to its highest level since the US #FTX collapse 15 months ago. Additionally, #Binance open interest rates with perpetual contract
(Continued) ???? pic.twitter.com/kuyKNGmFpV
— Santiment (@santimentfeed) January 12, 2024
While that was happening, a key BTC indicator turned bearish. Ali, a popular crypto analyst, recently posted a tweet highlighting this BTC‘s Inter-Exchange Flow Pulse (IFP). For starters, the metric tracks BTC flows between different trading platforms.
According to Ali’s tweet, the metric had fallen below the 90-day average. Whenever the measure reaches that level in history, BTC’s price action turns bearish.
Could we see a market top for this? #Bitcoin?
The Inter-exchange Flow Pulse (IFP), which follows $BTC flows between different trading platforms, has just fallen below the 90-day average. Historically, this shift often signals a bearish turn in the economy #crypto market! pic.twitter.com/ohkaKHP7ZO
— Ali (@ali_charts) January 12, 2024
And as predicted, the king of cryptos witnessed a major price correction. According to CoinMarketCapIn the last 24 hours alone, BTC has fallen more than 7%.
At the time of writing, BTC was trading below $43,000 at $42,803.92 with a market cap of over $838 billion.
Selling pressure on Bitcoin is high
As mentioned earlier, BTC trading volume increased in the recent past. However, most of this traction came from sell-offs. According to the latest data, 4,000 BTCs worth over $175 million have been moved from Grayscale’s Bitcoin Trust to Coinbase.
Recent blockchain analysis reveals a huge step.
4,000 Bitcoins (worth $175 million) have been moved from Grayscale’s Bitcoin Trust to Coinbase.
The transfers took place in four batches of 1,000 BTC each.
Source: Arkham pic.twitter.com/IigUgaxPyX
— Kashif Raza (@simplykashif) January 13, 2024
Not only that, but whales also sold their Bitcoin holdings.
Lookonchain recently posted a tweet highlighting an interesting whale activity. According to the tweet, a whale deposited all 2,742 BTC worth $127.5 million to Binance after the ETF’s approval, earning the whale a profit.
One whale dropped off all 2,742 whales $BTC($127.5 million). #Binance to take profit after the #Bitcoin spot ETF opened trading.
The whale withdrew 2,742 $BTC($53 million) from #Binance between October 7, 2022 and December 29, 2023, at an average price of $19,337.
Profits exceeded $74 million! pic.twitter.com/1O96Z9ihie
— Lookonchain (@lookonchain) January 12, 2024
To better understand whether selling pressure remained high, AMBCrypto checked Santiment’s data.
Our analysis showed that BTCThe company’s supply on the exchanges exceeded the supply off the exchanges, clearly indicating that investors were dumping BTC. This major sell-off could also have played a major role in BTC’s latest price correction.
Source: Santiment
Our look at CryptoQuant’s facts also painted a similar picture. BTC’s foreign exchange reserves increased, indicating higher selling pressure. The aSORP turned red. This meant more investors sold at a profit. In the middle of a bull market, this could indicate a market top.
Not only that, BTC’s Coinbase premium also turned red after quite a few weeks, indicating that selling sentiment was dominant among US investors.
Source: CryptoQuant
What can you expect from BTC?
The negative price action also affected the coin’s market sentiment. An analysis of Santiment’s data showed bearish sentiment BTC rose when weighted sentiment fell significantly on January 12, 2024.
Nevertheless, BTC remained a hot topic of discussion in the crypto world, evident from its high social volume.
Source: Santiment
To see if investors should expect BTC’s price to drop further in the coming days, AMBCrypto analyzed BTC’s daily chart. The analysis revealed quite a few bearish market indicators, which pointed to further price movement south.
Read Bitcoins [BTC] Price prediction 2024-25
For example, BTC’s MACD showed a bearish crossover. Both Bitcoin’s Money Flow Index (MFI) and Relative Strength Index (RSI) rested near their respective neutral zones.
Moreover, the Chaikin Money Flow (CMF) recorded a sharp decline, raising the possibility of a sustained price decline.
Source: TradingView