Will unrealized profits and kimchi premium index surge, making Bitcoin ETF a “Sell the news” event?
Analysis firm CryptoQuant has cited several data points to suggest that Bitcoin (BTC) faces a potential downside risk and that this could result in the Bitcoin spot ETF becoming a “sell the news” event.
Short-term unrealized profit ratio is too high
Bitcoin miners continue to sell off
The Korean kimchi premium index is also surging
The investment adage “Buy the Rumor, Sell the News” has been applied in numerous real-life cases, where investors often have expectations for anticipated events and buy in. However, when the anticipated event actually occurs and is heavily reported in the media, buying activity has already exhausted, resulting in a price drop due to the exhaustion of positive factors.
Could this be similar to the recent situation in the cryptocurrency field where there is anticipation for the approval of the Bitcoin spot ETF?
Advertisement – Continue reading below
The Block
Citing a report from CryptoQuant, it is noted that market participants have accumulated a significant amount of unrealized profit after Bitcoin crossed the $40,000 mark.
In particular, short-term Bitcoin holders have an unrealized profit ratio of up to 30%, which has historically been a signal for a price correction.
Bitcoin miners continue to sell off
CryptoQuant analysts also mentioned that with Bitcoin’s price staying above $40,000, miners have increased their selling in recent weeks, which could further intensify selling pressure on Bitcoin.
The Korean kimchi premium index is also surging
CryptoQuant previously mentioned that the Korean cryptocurrency exchange’s premium index is often used to gauge whether short-term prices are too high, especially considering the FOMO sentiments of Korean retail investors.
The kimchi premium index does indicate an overvaluation, reaching levels seen in January 2022.
bitcoin
BTC
unrealized profit
Bitcoin
kimchi premium
Further reading
Ordinals Creator Challenges “Bitcoin Maximalists” to Face Reality: A Guide to Confronting Real Challenges
JPMorgan CEO Takes Another Swipe at Bitcoin: Only Used for Crime, Governments Should Shut It Down
