Cover photo by: Kamil Pietrzak – Unsplash
Bitcoin price is currently moving steadily but has failed to meet popular expectations. After the approval of the spot Bitcoin exchange traded funds (ETFs), market participants expected possible scenarios.
In these possible scenarios, Bitcoin broke the critical resistance at $48,000 and continued to reach new highs, or the cryptocurrency fell back to $30,000. As usual, the market has failed to please the audience as BTC is trading at $42,000.
BTC price is trending upwards on the daily chart. Source: BTCUSDT on Tradingview
Bitcoin price ready for a decline?
The spot BTC ETFs have influenced the market; The capital flows from these financial products were used to suppress cryptocurrency. A pseudonymous analyst has been tracking crypto exchange Coinbase to link flows to Bitcoin price action.
BTC inflows into Coinbase have been increasing since its initial launch on January 11th. This trading venue is crucial due to its role as a custodian in most spot Bitcoin ETFs filed with the US Securities and Exchange Commission (SEC).
Therefore, asset managers looking to buy or sell BTC turn to Coinbase. The exchange sees fluctuations in its Bitcoin price on the spot market compared to other exchanges.
As trading volume on Coinbase has increased since the launch of spot Bitcoin ETFs, the platform is seeing some of its highest activity. The Bitcoin price is now trending sideways. The pseudonymous analyst explained:
(…) The supply comes from somewhere, obviously GBTC and perhaps some others, such as CME futures. But the most important thing is that Coinbase is still at a discount compared to other spot trading venues, and that is very weak, unless you are managing billions of dollars I can probably wait for Coinbase to drive the market higher , instead of reducing sales figures.
Another crypto analyst echoed these words; The chart below shows that the Coinbase Premium Gap signals strong selling pressure. If history repeats itself, the metric points to a sharp crash for Bitcoin.
Coinbase Premium Gaps Signal Problems for Bitcoin. Source: CryptoQuant via JA Maartun on X
With this in mind, the analyst recommends “patience” as Bitcoin moves sideways and the Coinbase Premium Gap signals a possible drop in support.
Bitcoin ETFs break record
According to a Reuters report, spot Bitcoin ETFs have attracted nearly $2 billion in the first few days of trading. BlackRock and Fidelity led these capital inflows and will maintain them depending on their fee structure, claims Sui Chung, CEO of CF Benchmarks, adding:
Unsurprisingly, those that charge lower management fees become more attractive compared to their competitors. Another key aspect is brand awareness.
However, several experts have questioned these flows and disputed the numbers. Three days after launching the ETFs, NewsBTC reported $800 million in new inflows, based on a report by Eric Balchunas, ETF expert for Bloomberg Intelligence.
Cover image from Unsplash, chart from Tradingview
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