Analysis firm CryptoQuant cites several data points to suggest that BTC faces a risk of a downward correction, which could potentially turn the Bitcoin spot ETF into a “Sell the news” event in terms of timing.
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High short-term unrealized profit ratio
Continuous selling by Bitcoin miners
Korean kimchi premium index also surges
High short-term unrealized profit ratio
The investment adage “Buy the Rumor, Sell the News” has been applied in numerous real-life cases, where most investors buy in anticipation of an event and when the expected event actually happens and is extensively covered by the media, buying pressure subsides. In a situation where the positive factors have been fully priced in, the price subsequently declines.
Could this be similar to the recent expectations surrounding the approval of a Bitcoin spot ETF in the crypto space?
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The Block
Citing a CryptoQuant report, market participants have accumulated high amounts of unrealized profit after Bitcoin crossed the $40,000 mark.
In particular, the unrealized profit ratio of short-term Bitcoin holders reached as high as 30%, which typically appears before a price correction in historical trends.
Bitcoin miners continue to sell
CryptoQuant analysts also mention that as Bitcoin’s price remains above $40,000, miners’ selling has increased in the past few weeks, potentially intensifying selling pressure on Bitcoin.
Korean kimchi premium index surges
CryptoQuant previously noted that the kimchi premium index of Korean cryptocurrency exchanges is often used to gauge whether short-term prices are too high, especially considering the FOMO sentiment among Korean crypto traders.
The kimchi premium index does indeed show signs of being excessively high, reaching levels seen in January 2022.
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Further reading
Ordinals creator faces “Bitcoin maximalist” challenge: A guide to combating real-world challenges
JPMorgan CEO takes another swipe at Bitcoin: Only used for crime, governments should shut it down