Bitcoin prices should ‘logically’ correct in Jan, but crypto’s a ‘wild card’

Bitcoin should logically be headed for a “sell-the-news” correction in January, but some analysts argue this may not necessarily happen as some expect.

The price of Bitcoin (BTC) should “logically” undergo a correction once spot Bitcoin exchange-traded funds (ETFs) are approved, though commentators also concede that crypto is a “wild card” — and nothing is certain. 

Bitcoin has been gaining momentum over the last 11 months, with a sudden jump in March amid banking uncertainty, another spike in June when BlackRock filed for a spot Bitcoin ETF and again in October, similarly due to optimism over spot Bitcoin ETFs.

On Dec. 3, Bitcoin cleared the $40,000 mark, its highest level in 19 months.

Sell the news event

James Edwards, a cryptocurrency analyst at Finder, said that “logically,” the eventual approval of a spot Bitcoin ETF should trigger a “sell the news” event.

“I’d like to say that logically this makes it a sell-the-news type event.”

“Buy the rumor, sell the news” is a phrase that describes a situation where a stock or asset rises ahead of major news or events but falls once the news is confirmed.

“The idea that this is going to lead to widespread institutional buying on day 1 is a bit too optimistic,” said Edwards, adding it is unlikely fund managers will “ape in the moment it goes live.”

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