The introduction of Bitcoin (BTC) exchange-traded funds (ETFs) has triggered a significant sell-off, resulting in a sharp decline in the price of Bitcoin.
After the ETFs received approval and began trading on Thursday, they triggered a “sell the news” event that caused the value of Bitcoin to plummet from its initial trading price of $46,500 at the time of approval to a low of $43,200 in a matter of hours.
In the last 24 hours, Bitcoin, the largest cryptocurrency by market capitalization, saw a 7% decline. Its gains over the past 30 days were limited to just 4%, erasing much of the progress made over that period.
Additionally, as Selling pressure Although Bitcoin price continues to rise following approval, there are signs that Bitcoin price may face further downward pressure.
Bitcoin price under pressure
CryptoQuant analyst JA Maartunn observed significant sell orders on Bitcoin's two-week chart on Wednesday. Notably, three clusters of sell orders were positioned between $46,100 and $48,000 and included batches of 755, 1,031, and 794 BTC, respectively.
After According to the CryptoQuant analyst, such patterns are typically associated with market spikes unless these orders are later withdrawn or executed.
This influx of sell orders could explain the weak reaction to the ETF approvals until now, as it appears that selling pressure has been building. However, the situation has worsened even further.
According to Maartunn, additional sell orders were detected on Friday, indicating that the seller is not done yet. Two large sell orders were placed just above the current Bitcoin price: one for 894 BTC at $44,000 and another for 1,071 BTC at $45,100.
Sell orders have been placed on BTC's 2-week chart since Wednesday. Source: Maartunn on X
These developments suggest that market participants are using the ETF news to dump their Bitcoin holdings, leading to increased selling pressure and subsequent price decline.
Stabilization of the market after this period of increased selling pressure remains uncertain. It was believed that the introduction of ETFs would generate increased institutional interest and potentially drive up the price of Bitcoin.
However, it is important to note that the impact of these ETFs is likely to unfold over the long term and will not be felt within days, weeks or even months. It will likely be years before we can fully assess the impact and consequences ETF integration on the Bitcoin market.
Bitcoin’s bullish structure remains intact
Amid ongoing selling pressure, several support lines could potentially halt and bring down the downtrend positive news for Bitcoin price and BTC bulls.
Although Bitcoin has already lost its $44,000 support level, there is another crucial threshold at $42,700 that could prevent further decline. If this level is held, Bitcoin has a chance to reclaim the $43,000 mark and reverse the bearish momentum.
The daily chart shows the price decline of BTC. Source: BTCUSDT on TradingView.com
If the $42,700 support is broken, additional support lines will come into play. These include $42,300, $41,700, and $41,200, which serve as the final hurdles before a possible test Support level of $40,000. The $40,000 level is significant as it represents the final support before a possible decline towards $38,000.
However, there is a positive aspect that Bitcoin bulls should consider. The current bullish structure of the cryptocurrency remains intact as long as the decline does not break through the $29,900 level.
This level marked the beginning of the current uptrend and maintaining it would ensure the maintenance of the overall positive market structure.
Featured image from Shutterstock, chart from TradingView.com
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