The CEO of CryptoQuant, Ki Young Ju, has made a prediction about the spot Bitcoin exchange-traded fund (ETF) market. He believes that if the price of BTC continues to decline, there will be a resurgence in demand for Bitcoin ETFs. Young Ju based this prediction on historical net flow trends, noting that when the price of Bitcoin reaches certain support levels, there is typically an increase in demand for ETFs. Currently, data from BitMEX Research shows that spot BTC ETFs have been experiencing negative net flows, with outflows from the Grayscale Bitcoin Trust ETF and declining inflows to other BTC ETFs.
Young Ju mentioned that new Bitcoin whales, particularly ETF buyers, have a cost basis of around $56,000. He expects significant inflows to ETFs to occur if the price of Bitcoin drops to this level. According to data from Markets Pro, Bitcoin’s price has been fluctuating between $62,000 and $68,000 in the past week. Young Ju suggests that a further decline in price is possible, as corrections typically result in a maximum drop of around 30%. If this were to happen, Bitcoin could drop to around $51,000 from its recent all-time high of $73,750.
The recent correction in Bitcoin’s price was attributed to overheated market conditions, which analysts call a “pre-halving retrace” ahead of the Bitcoin halving event scheduled for April. A report from CryptoQuant indicates that the Bitcoin bull cycle is not yet over. They argue that investment flows from new investors are still relatively low and price valuation metrics are below levels seen in previous market tops.
The upcoming Bitcoin halving event has historically played a significant role in driving the price of BTC. It has often led to a parabolic uptrend in the market. Given this historical trend, it is expected that the Bitcoin halving event, coupled with the potential decline in price, could lead to increased demand for Bitcoin ETFs. This prediction by CryptoQuant’s CEO suggests that the spot Bitcoin ETF market may experience a resurgence in the near future.
This prediction seems like wishful thinking. Just because there have been historical trends doesn’t guarantee the same outcome this time. 🙄