“We expect a further significant market correction with critical support levels for Bitcoin at $38,000 and $36,000,” stated the experts.
Bitfinex noted a significant decrease in unrealized profits, particularly among short-term holders, at the end of last week, which could contribute to a potential increase in selling pressure from recent buyers. The report highlighted that these market participants tend to overreact to short-term fluctuations in exchange rates, which could exacerbate the market correction.
“The tendency of such market participants to overreact to short-term fluctuations in exchange rates could increase sales, and we anticipate the possibility of further significant market correction,” the report noted.
In addition, the experts highlighted that the overall financial market is now in a “more complex, more liquid, and perhaps more mature” state. Despite recent outflows from Grayscale’s new ETF, the company still maintains a significant presence in the market, according to analysts.
It should be noted that Bitcoin failed to reach new all-time highs after the launch of spot exchange-traded funds. In fact, just two weeks after the approval of the ETF, the cryptocurrency suffered a complete loss of over 20% in price.
Furthermore, on January 17, miners sold a record-breaking 10,233 BTC (equivalent to approximately $450 million). This trend indicates a shift among miners from accumulation to sales, a behavior typically observed during periods of increasing cryptocurrency prices.