Will the recurrence of a magical cycle drive BTC down to $30,000, and what short-term black swan event might trigger it?
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Will the recurrence of a magical cycle drive BTC down to $30,000, and what short-term black swan event might trigger it?
Bitcoin is essentially a risk asset, and after entering the U.S. market, it may experience larger adjustments due to changes in macro factors.
Navigating Web3 tides with focused insightsBy Asher Zhang, TechFlow
After the approval of Bitcoin ETFs, how will BTC's short-term price trend evolve? This has become the market’s primary focus. From a cyclical perspective, Bitcoin is highly likely to experience a significant pullback. From a capital flow standpoint, where is the main selling pressure coming from? What are the key factors truly influencing Bitcoin’s near-term movements? And what are the deeper reasons behind a potential major correction? This article explores these questions.
If BTC Follows Historical Cycles, ~$30,274 Could Be Key Support
Bitcoin undergoes halving events approximately every four years, and its market cycle typically sees a bull-bear rhythm repeating every four years. This four-year halving pattern has played out multiple times in the industry, and many investors place strong trust in it, using it to guide their investment decisions and thereby influencing Bitcoin’s price trajectory. In addition, Bitcoin ETFs represent a first in Bitcoin’s history, leading many to draw comparisons with gold in forecasting Bitcoin’s future path. Overall, both perspectives suggest that after a retracement, Bitcoin is expected to eventually reach new highs. The current question is: how deep could this BTC correction go?
From a halving-cycle perspective, BTC has seen three historical transitions from bear to bull markets, each marked by a strong rebound from lows. Analyzing these patterns using Fibonacci retracement levels on price charts reveals the following: In December 2013, BTC dropped from its first bull market peak of $1,175 to a low of $162, then rebounded to $789 by June 2016—precisely aligning with the 0.618 Fibonacci retracement level. After that, it corrected down to the 0.382 level before entering the main bullish phase. In December 2017, BTC fell from its second bull market high of $19,891 to a low of $3,215, then rose to $13,971 by June 2019—again hitting the 0.618 Fibonacci level. It then corrected twice: the first time to around the 0.539 level (~$6,434), and the second amid pandemic-driven panic, bottoming near the 0.738 level (~$3,791), before launching into the next major uptrend. With the recent Bitcoin ETF approval, BTC reached $48,988, matching the 0.618 Fibonacci retracement level. If history repeats, the likely correction depth would be to the 0.382 level, corresponding to a support zone around $30,274.
Looking at gold ETF cycles: In March 2003, Australia launched the world’s first gold ETF. In October 2004, the SEC approved the first U.S. gold ETF, GLD, which officially began trading in November 2004. At the time, the Federal Reserve maintained relatively loose monetary policy. Gold surged significantly after the first gold ETF was approved, continuing its rise until the U.S. ETF started trading. After GLD’s launch, it saw a small further rally, but within two months declined about 9%, falling below its pre-approval price. However, over the following years, increasing capital flowed into the market, and the 2008 financial crisis propelled gold to $1,000. Recently, after Bitcoin ETF approval, BTC hit a high of $48,988. As of January 16, its lowest price was $41,360—a maximum drop of 15.6%. In terms of percentage decline, Bitcoin appears to have fallen substantially, but the duration of the drop remains relatively short.
From a cyclical view, Bitcoin has effectively followed the general path of gold ETFs—rising steadily ahead of approval and experiencing a short-term correction afterward. Currently, Bitcoin’s correction in magnitude has already exceeded that of gold, though the time frame is still brief. Based on previous minor bull market peaks, the current adjustment may still be premature. However, given significant shifts in Bitcoin’s external macro environment, barring black swan events, the correction is unlikely to be excessively deep. This article suggests Bitcoin may enter a consolidation phase similar to gold’s post-ETF period—trading time for space—during which major players likely engage in accumulation and shakeout maneuvers.
Grayscale GBTC Is Main Source of Selling Pressure, But Buyers Are Holding Firm
The primary source of Bitcoin’s selling pressure comes from profit-taking. On one hand, there is growing market anticipation of a correction. Since Bitcoin’s rebound from its lows, it hasn’t experienced a significant pullback, leading to “fear of heights” among traders. The theoretical basis supporting this sentiment stems from the cyclical analysis discussed earlier. Another major source of selling pressure is Grayscale’s GBTC.
Prior to GBTC’s conversion into a spot Bitcoin ETF, it traded at a persistent discount for an extended period. By December 2022, GBTC’s discount had widened to as much as 50%. However, following Grayscale’s legal victory over the SEC in 2023, the discount gradually narrowed. After the SEC approved Bitcoin ETFs, profit-takers in GBTC created short-term selling pressure on the market.
According to Yahoo Finance, spot Bitcoin ETFs recorded $4.6 billion in trading volume on their first day and $3.1 billion on the second. Data from BitMEX Research shows that on the second trading day, GBTC saw outflows of $484 million, with total outflows reaching $579 million over the first two days. Overall, GBTC has been experiencing net outflows.
Despite GBTC being the main source of outflows, buying demand has effectively absorbed the selling pressure, suggesting the current phase remains one of institutional accumulation. According to data monitored by crypto asset fund manager EMC Labs, GBTC saw net outflows of $579 million in its first two trading days, while other ETFs recorded net inflows of $819 million—resulting in a total net inflow of $240 million across all spot Bitcoin ETFs. From January 10–12, BTC posted three consecutive days of record-high 12-month CEX deposit volumes, totaling over 300,000 BTC. However, withdrawals also increased, resulting in a net deposit of only 16,000 BTC. From January 13–14, deposits sharply declined to 58,000 BTC, while withdrawals rose further, leading to a net outflow of 20,000 BTC from CEXs. Thus, between January 10–14, exchanges saw a net outflow overall, indicating buyers successfully absorbed the selling pressure. During this period, CEXs accumulated $3.3–3.6 billion in buying power—an indicator derived from comparing net BTC/ETH inflows with stablecoin net balances on exchanges. Additionally, stablecoin issuance added $1.7 billion last week, on top of $2.1 billion in the first week of January, totaling $3.8 billion in new stablecoins. External capital inflows remain at a three-month high. In summary, Bitcoin is currently undergoing a shakeout phase, with buyers and sellers rebalancing. Once this adjustment concludes, a new upward move may begin.
BTC’s Short-Term Movement May Hinge on Macroeconomic Shifts
What lies ahead for Bitcoin? Market influencers hold diverse views, with both bullish and bearish outlooks. This article highlights a few representative opinions for reader reference.
Cathie Wood stated that after ETF approval, Bitcoin may not follow the “sell the news” pattern as some predict. Based on our five-year investment experience, we believe inflows into this new asset class—especially institutional capital—will be substantial. Even modest institutional allocation can significantly drive up the price of an increasingly scarce asset like Bitcoin.
Mindao: I don’t expect massive capital inflows in the short term. Bitcoin ETFs have already captured around 2% market share, and the market needs time to absorb and digest existing capital. As Matt Hougan, Chief Investment Officer at Bitwise, noted, the market may be overestimating the short-term impact of spot Bitcoin ETFs while underestimating their long-term significance. Kiwi believes that, in the short term, funds are already largely committed ("pressed in"), so we may see a gradual downtrend without significant new capital entering.
Arthur Hayes: The crypto bull market is still in its early stages, and we must restrain our enthusiasm. We need to stay vigilant and size our investments accordingly. Simply put, I’m preparing for a sharp downturn across all cryptocurrencies in March. Various indicators lead me to believe this will happen. I expect reverse repo balances to reach $200 billion by early March—calculated based on the declining pace from different starting points in 2023. If reverse repo drops close to zero by early March, financial markets could begin to fall. I anticipate that regardless of Bitcoin’s price at that time, it will undergo a 20% to 30% correction. With spot Bitcoin ETFs now trading in the U.S., this shakeout could be even more severe.
In summary, when it comes to Bitcoin’s long-term outlook, nearly all major commentators remain optimistic—though that’s not the focus of this article. In the short term, Bitcoin’s price movement will primarily depend on the pace of capital inflows into Bitcoin ETFs, with a gradual downtrend serving as a likely scenario for market cleansing. Additionally, delayed expectations for Fed rate cuts could trigger significant corrections in both stock and crypto markets—this is the black swan event this article considers most plausible. From an asset-class perspective, Bitcoin is fundamentally a risk asset. Now integrated into traditional markets via ETFs, it may experience amplified volatility in response to macroeconomic shifts.
Conclusion
From a cyclical perspective, if Bitcoin follows historical patterns, its correction low could settle around $30,000. From a moving average standpoint, the MA200 serves as a critical bull/bear support line, currently around $33,000—likely acting as the real floor. Even if briefly breached, a swift recovery is expected. In the short term, this article leans toward BTC undergoing a period of gradual, grinding consolidation. During this phase, macroeconomic factors represent the greatest uncertainty—and could ultimately reignite Bitcoin’s historic cyclical momentum.
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