The correction that Bitcoin experienced last week after reaching a 19-month high may herald a new era in cryptocurrency markets. Warning on this issue, analyst The Flow Horse urges Bitcoin investors to be careful before the approval of a potential spot Bitcoin exchange-traded fund (ETF). Here are the details…
ETF approval could lead to a surge in Bitcoin price, according to the widely followed analyst, but he warns that much of a potential rally could come from leveraged buyers as there is less demand from spot buyers.
As we previously reported, the sharp correction in Bitcoin and other crypto assets resulted in the liquidation of long positions worth over $400 million. This liquidation event affected approximately 120,000 investors, according to Coinglass. The Flow Horse states that such events cause short-term fluctuations in the crypto market and investors should be prepared for such situations.
The analysis found that price changes in the crypto market pose high risks to investors and “bigger fiascos are likely to come.” is emphasized.
The Flow Horse points out that short-term market movements, especially following major announcements, can pose significant risks for investors. Therefore, he warns investors to adopt a more cautious approach and follow the developments in the market closely.
“Something to consider if you are bearish on BTC at any time frame. It is probably better to wait sideways rather than open a short position. A surprise ETF announcement may come before the end of the year, and since this is a first, it is unknown how the market will react to it.
NEWS CONTINUES BELOW“We saw offers on some exchanges momentarily evaporate, so the risk of jumping into ETFs is very real.”
As a result, the analyst urges investors to be aware and act carefully against the risks brought by the volatility in the crypto market, as well as the possible rise in Bitcoin price. This warning sends the message that anyone trading crypto assets should understand the dynamics of the market and apply risk management strategies.
At the time of writing, Bitcoin is trading at $41,125, down nearly 8% from the 19-month high reached on December 8.
You can follow the current price movement here.