A popular cryptocurrency analyst issued a warning after the market’s flagship Bitcoin (BTC) corrected from its highest level in the past 19 months. The analyst, known by the pseudonym The Flow Horse, indicated that the approval of a spot Bitcoin exchange-traded fund (ETF) would lead to a rise in BTC price, but that this rise would most likely come from leveraged buyers due to “most enthusiasts” owning fewer tokens. He also claimed that there was demand from spot buyers as well.
Earlier this week, a sharp correction in BTC’s price resulted in the liquidation of over $400 million in long positions across various cryptocurrencies, including Bitcoin. According to the crypto data aggregator Coinglass, about 120,000 investors were affected by this liquidation event. The Flow Horse also warned of the risks associated with significant changes in Bitcoin prices following market-affecting announcements in the short term.
The expert used the following statements on the subject: “If you’re showing a downward trend at any time frame in BTC, there’s something you need to consider. Rather than expressing a short position, it’s probably better to be flat. A surprise ETF announcement could come before the end of the year, and since it’s a first, it’s unknown how the market will react to it.”
The analysis expert highlighted potential risks related to leveraged purchases following Bitcoin’s price correction and the expectations of a spot ETF, warning investors about market fluctuations. At the time of writing, Bitcoin was trading around $41,125, approximately an 8% drop from its highest level in the past 19 months, which it reached on December 8th.
