Over $1 billion worth of BTC susceptible to be sold as Bitcoin price hints at short-term correction
- Bitcoin price reclaimed $36,000 but could see further correction due to the bearish divergence noted over the last three weeks.
- Investors have sent over 34,000 BTC worth over $1.12 billion to exchanges in the past 30 days.
- Analysts suggest there is a less than 50% chance for spot Bitcoin ETF to be approved in this window marked until November 17.
Bitcoin price corrected in the last four days after nearly three weeks of consistent rally, forming a bearish divergence. The result of this divergence would be Bitcoin (BTC) likely falling before it can resume the macro uptrend.
Investors, however, seem too eager to book profits, which is evidenced by the inflow of BTC into the exchanges. They might have to wait a little longer, given that the spot Bitcoin Exchange Traded Fund (ETF) applications might still have a while before they are approved.
Spot Bitcoin ETF approval likely to be delayed
At the moment, the spot BTC ETF applications are the biggest catalyst for Bitcoin price, but it looks like they might not be approved in this window. This window, which began on November 8 and extends to November 17, marks the deadline for the Securities and Exchange Commission (SEC) to provide a decision on the ETF applications.
According to Bloomberg ETF analyst James Seyffart, the chances of approval this week are less than 50% and greater than zero. However, he maintained his stance on the 90% probability of the applications being approved by January 10, 2024.
SEC delaying the decision by the next deadline – November 17 – would mean that the regulator would have to rule on the 12 applications by January, which is now the next major period where Bitcoin price could rally.
Bitcoin price to see some decline
Bitcoin price climbed back to $36,000 on Wednesday, trading at $36,050 at the time of writing. Over the past four days, BTC has declined by about 4.7% after failing to breach the $38,000 mark. The rise noted in the last three weeks marked a bearish divergence as the Relative Strength Index (RSI) formed lower highs as BTC price registered higher highs.
Bearish divergences suggest that the market is bullish, but the momentum is slowing, which tends to result in a price decline. This was noted with the recent fall, but Bitcoin price will likely see further drawdown before it can begin a recovery towards $38,000.
This will be achieved if BTC manages to bounce off the crucial support level of $33,901, which will act as a boost for the cryptocurrency to breach the $36,833 barrier, invalidating the bearish divergence.
However, if Bitcoin price falls through this support level, the bullish thesis would be invalidated, pushing BTC to tag $31,507 or lower.
Bitcoin investors might hold off selling
Bitcoin investors had been expecting good news this week regarding the spot BTC ETF approvals. In line with this optimism, BTC holders had prepared to sell off their holdings as soon as price rallied. This is evinced by the inflow of 34,000 BTC worth over $1.12 billion into exchanges.
Inflows suggest that the sentiment of selling for booking profit or offsetting losses is likely, and given the recent rally, in the case of BTC, it might be the former.
However, with the possibility of the ETF approval this week standing at less than 50%, these investors might refrain from selling their BTC. Should Bitcoin price bounce off $33,901 and climb higher, some of these 34,000 BTC might be offloaded, but the larger chunk of profit booking will likely take place in January following the decision on the 12 applications.