Bitcoin (BTC), the largest cryptocurrency on the market, has since fallen sharply below the $41,000 mark exchange-traded funds (ETFs) for Bitcoin went online on January 12th.
The subsequent profit-taking, selling pressure, and outflows from Grayscale's Bitcoin Trust ETF (GBTC) played a significant role in the downtrend.
Bitcoin transfers from Grayscale to Coinbase are increasing
On Tuesday, NewsBTC reported that Grayscale initiated the first BTC outflows from its holdings to a Coinbase six days ago, which totaled 4,000 BTC (approximately $183 million) within six days.
However, the asset manager resumed outflows from the trust to the exchange on Tuesday, sending another 11,700 BTC (equivalent to $491.4 million) to Coinbase.
Also on Friday Data Arkham Intelligence announced that 12,865 BTC ($529 million) was transferred from the Grayscale Trust address to Coinbase Prime.
The latest BTC transfers from Grayscale to Coinbase. Source: Arkham Intelligence
In total, the Grayscale Trust address has transferred 54,343 BTC ($2.313 billion) to Coinbase Prime over five consecutive trading days since January 12 during US stock market hours, which undoubtedly contributed Downtrend in Bitcoin price.
Selling frenzy among BTC miners
In addition to Grayscale's selling spree, there was increased selling activity from Bitcoin miners in the run-up to the upcoming Bitcoin halving.
Crypto analyst Ali Martinez Highlights that on-chain data from CryptoQuant indicates a significant increase in selling activity by BTC miners. In the last 24 hours, miners have dumped nearly 10,600 BTC, worth about $455.8 million.
Sustained selling pressure has seen BTC trade at $40,900, down slightly by 0.2% in the last 24 hours.
Decrease in miner BTC reserves. Source: Ali Martinez on X
The downward trend was evident over various time periods, with declines of 5%, 6% and 7% in the seven, fourteen and thirty day periods, respectively. Yet despite these recent setbacks, Bitcoin remains remarkably positive, with an impressive 98% gain year-to-date.
Overall, the combined impact of Grayscale's Bitcoin Trust ETF outflows and increased miner selling activity has added bearish pressure to Bitcoin price, breaking Bitcoin price Critical support $41,000 level.
The focus now turns to how Bitcoin bulls will defend the crucial support level at $40,000, which serves as the last line of defense before a possible decline towards the $37,700 level.
The daily chart shows the price decline of BTC. Source: BTCUSDT on TradingView.com
If this support level fails to hold, the Bitcoin market could see further price declines, potentially pushing the price towards the $35,800 level. However, with the Bitcoin halving scheduled for April, bullish investors are hoping that this event will spark a significant bull run.
Featured image from Shutterstock, chart from TradingView.com
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