From a technical and on-chain standpoint, the Bitcoin (BTC) price has printed not one, but numerous sell signals. As a result, investors must take prudence and limit their positive perspective, at least until the situation changes.

The Bitcoin ETF is critical to the continued surge

For some years, Bitcoin spot Exchange-Traded Fund (ETF) has been a speculative event. However, ETF-related innovations have recently accelerated. After losing a run of crypto lawsuits, the US Securities and Exchange Commission (SEC), which approves or disapproves ETF products, has been on the defensive.

The initial run-up in Bitcoin prices began in mid-October, following the SEC’s dismissal of Grayscale’s lawsuit for transforming the GBTC product into a spot ETF offering, as well as other ETF-related news. However, because there have been no updates, BTC has been trading sideways.

In any case, the speculative Bitcoin trading frenzy will mutate to a new level in January 2024, the next critical date for ETF decision. This event will either make or break the cryptocurrency space. However, investors should be prepared for a regression before then, especially given that the Bitcoin price has been emitting multiple sell signals.

Bitcoin’s price may fall soon

Bitcoin’s (BTC) price increased by 30% between October 16 and 24, reaching a local high of $35,280. Because of the tremendous bullish momentum, this move was spectacular. However, since the formation of this swing high, BTC has been trading sideways. The daily candlestick closures have generated an upward slope since October 25, which may appear bullish to the naked eye. A closer examination of the Relative Strength Index (RSI) reveals that it is sliding downward. This divergence is bearish and frequently results in a pullback or correction.

This is the first major sell signal that investors should be aware of.

In addition to the bearish divergence, the Momentum Reversal Indicator (MRI) has flashed two sell signals. The first sell signal was posted in the shape of a red down arrow following the daily candlestick closure on October 23. The MRI showed another red down arrow nine days later. This indicator predicts one to four down candlesticks.

As a result, if things continue as they are, investors should expect to see the Bitcoin price fall. The Fair Value Gap (FVG) range, which stretches from $30,248 to $32,832, and its midpoint of $31,540, are important support levels to monitor.

On-chain metrics support the pessimistic picture

Santiment’s Network Realised Profit/Loss (NPL) indicator shows two big surges of 524 million and 542 million on October 24 and 28, indicating that investors are booking profits. When comparable profit-taking events occurred in July, along with bearish divergence, Bitcoin fell from around $31,400 to $25,800.

The Whale Transaction statistic, which has been soaring since October 23, reflects the same pessimistic perspective. A rise in this index, which measures transactions of $100,000 or more, indicates that whales are liquidating their holdings to book profits.

The 30-day Market Value to Realised Value (MVRV) indicator is designed to calculate the average profit/loss of BTC investors over the last month. The MVRV is currently hovering at 10%, down from 16% on October 23. This figure implies that the average profit of investors who bought BTC in the previous month is 10%. These holders may sell in order to realise their profits, causing a sell-off.

In the last year, the 30-day MVRV has often created a local peak of 16% to 22%. As a result, this area is referred to as the “Danger Zone” because it is followed by a price correction in Bitcoin.


Overall, the forecast for Bitcoin price appears negative, not only from a technical standpoint but also from an on-chain standpoint. The only way to avoid these sell signals is if there is an ETF-related development.

In such a circumstance, Bitcoin’s price might break through the $35,000 barrier and head towards the psychological level of $40,000. This advance would render the bearish thesis untenable.

Leave a Reply

Your email address will not be published. Required fields are marked *