According to CoinDesk, Bitcoin (BTC) has experienced a 5% decline to $42,600 since the debut of spot ETFs in the U.S. on Thursday, in what appears to be a classic 'sell the fact' price action. The sell-off could continue in the near term, as analysis of bitcoin's price patterns and technical indicators by 10x Research suggests. Markus Thielen, leader of 10x Research, said in a note to clients on Monday that Bitcoin's RSI divergence signals a correction, adding that the pullback could run out of steam near the dynamic support level of $38,000.
A bearish divergence occurs when prices reach a new extreme and momentum indicators like the relative strength index (RSI) don't, hinting at upside exhaustion. BTC hit a two-year high above $49,000 last week, which the 14-day RSI failed to confirm. The subsequent price drop has validated the bearish divergence. The RSI produced a lower high last week as prices topped $49,000 for the first time since December 2021.
The MACD histogram, used to gauge trend strength and changes, has crossed below zero, signaling a bearish shift in momentum. According to Thielen, investors in Grayscale's ETF, the Grayscale Bitcoin Trust (GBTC), switching to other low-fee options will likely weigh on bitcoin's price. While Grayscale charges 1.5%, other asset managers like BlackRock charge 0.25%. GBTC, formerly a close-ended trust, is one of the largest bitcoin holders, with a coin stash of over $27 billion. GBTC shares began trading in 2013 and became redeemable on Jan. 11. 10x Research believes that investors will first sell before transferring their BTC exposure to another ETF issuer, causing downside pressure for Bitcoin and remaining an overhang.
