BTC Price Index and Live Chart – CoinDesk”>(BTC) has declined over 5% to $42,600 since spot ETFs debuted in the U.S. on Thursday in what appears to be a classic “sell the fact” price action.

According to 10x Research’s analysis of Bitcoin’s price patterns, technical indicators and other factors, the sell-off may continue in the near future.

In a Monday note, 10x Research led by Markus Thielen said that the RSI divergence of Bitcoin signals a correction. The firm added that the pullback may run out of steam around the dynamic support of $38,000.

A bearish divergence is when the price reaches a new high and the relative strength indicator (RSI) does not, indicating that there has been an exhaustion of gains.

BTC reached a high of $49,000 in two years last week. The 14-day RSI, however, failed to confirm this, as shown on the chart below. The subsequent price decline has confirmed the bearish divergence.

(TradingView/CoinDesk) (TradingView/CoinDesk) The RSI produced a smaller a high as prices topped $49,001 for the first since December 2021. (TradingView/CoinDesk) (TradingView/CoinDesk)

The MACD histogram is used to measure trend strength and change. It has now crossed below zero. This signals a downward shift in momentum.

According to Thielen’s analysis, switching from Grayscale’s ETF (the Grayscale Bitcoin Trust, GBTC) to another low-fee option will likely have a negative impact on bitcoin’s value. Grayscale charges a 1.5% fee, while other asset managers such as BlackRock charge only 0.25%. GBTC is one of the biggest bitcoin holders with a stash of coins worth over $27 billion. GBTC shares started trading in 2013, and were redeemable as of Jan. 11, 2014.

Grayscale bets that investors will gradually switch away from their annual 1.5% management fee ETF (due tax considerations) and instead choose other reputable companies who offer 80% lower fees. Grayscale and its parent company DCG have been the subject of much bad press. Grayscale, for example, charged a 2.0% fee on a fund that traded at a discount of 50% to its net asset values at one time. This meant they were overcharging GBTC ($27bn in market cap) holders.

Investors will sell their BTC first before they transfer it to another ETF issuer. This will continue to put downward pressure on Bitcoin, and it will remain an overhang,” added 10x.

Parikshit Miishra is the editor.