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Matrixport, a Singapore-based crypto management firm, has sounded the alarm and forecasts a 7% drop in Bitcoin's value over the next two weeks.
The company cites the turning of "one of its trading signals" to a bearish stance for the first time since August 2023.
This cautious outlook comes in the wake of earlier statements by Matrixport analysts, who are anticipating the rejection of all spot Bitcoin (BTC) exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) in January.
Matrixport's Analysis and Price Drop Warning
In a blog post on January 8, Matrixport expressed its anticipation of a potential decline in Bitcoin's price, raising concerns about the sustainability of the ongoing breakout attempt.
According to Crypto Potato, the firm highlighted the market consensus expecting SEC approval of spot Bitcoin ETFs by January 10. Matrixport suggested that savvy investors might leverage the anticipated approval for profit-taking, emphasizing that recent market activity had mitigated leverage, and the downside risk is anticipated to be limited.
However, the report cautioned that the price range of $36,000 to $38,000 might face a retest.
The analysis revealed a significant decline in Bitcoin's funding rate on crypto exchanges, dropping from 66.1% to 7.4% in January. This was considered a potential sign of technical vulnerability, especially as the sharp increase in funding observed earlier was deemed unsustainable.
SEC's Spot Bitcoin ETF Decision and Market Reaction
Matrixport's warning follows skepticism expressed by analysts about SEC Chair Gary Gensler potentially approving spot Bitcoin ETFs.
According to Crypto News, the firm highlighted Gensler's previous comments, suggesting a demand for stricter compliance in the crypto industry, indicating hesitance to endorse a spot Bitcoin ETF that could legitimize BTC as an alternative store of value.
The recent report from Matrixport triggered a rapid decline in Bitcoin's value to $41,500, according to CoinGecko data. The market's sensitivity to rumors and news was evident, with high-profile figures like Will Clemente attributing the sell-off to Matrixport's report.
Matrixport's co-founder, Jihan Wu, clarified that the company does not influence its analysts' reports, noting that the widespread reaction was unexpected.
Meanwhile, the broader crypto community eagerly awaits the potential approval of spot Bitcoin ETFs, contributing to positive sentiment and Bitcoin's price growth, surpassing $45,000 in early January for the first time since April 2022.
Photo: Aleksi Raisa/Unsplash
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