In a surprising turn of events, spot Bitcoin (BTC) was approved exchange-traded funds (ETFs) has not brought the expected immediate upward impact on the Bitcoin price.
Contrary to expectations within the crypto community, BTC saw a sharp decline of over 16% since ETF approval on Wednesday, January 11, falling below the key $40,000 mark. BTC bulls' failure to hold the support level has led to a test phase at the $38,000 level, accompanied by a 4.5% price decline in the last 24 hours.
Bitfinex whales are bucking the trend
Amid market volatility after According to Datamish, Bitfinex whales have been accumulating long Bitcoin positions since November 2023. This accumulation of approximately 4,230 BTC since January 17th marks the first sustained increase in Bitfinex BTC long positions after a sharp decline in November last year.
The increase in Bitfinex whales’ long positions since January 17th. Source: Datamish
The recent downturn in the BTC price This is partly due to increased selling pressure from miners and asset manager Grayscale. Grayscale has significantly increased its BTC sell-off since ETF trading began.
The transfer of a significant amount of BTC from the Grayscale Trust address to Coinbase, totaling 69,994 BTC ($2.9 billion), influenced market dynamics.
Additionally, reports suggest significant sell-offs in Grayscale's GBTC shares, including a notable sale of 22 million GBTC shares by the FTX estate worth nearly $1 billion.
Bitcoin liquidation zones abolished
The impact of the Grayscale sell-off is evident in the CoinGlass liquidation Heatmapwhich shows notable liquidation zones being wiped out on the 1-week chart.
While Grayscale's BTC dump contributed to the price decline, the increasing accumulation of long BTC positions on Bitfinex suggests potential Mood change. If the $38,000 support line holds, a price reversal could occur that takes BTC back above $40,000.
BTC’s one-week liquidation heatmap. Source: CoinGlass
Furthermore excluded GrayscaleInstitutional investors and asset managers participating in the ETF market have collectively purchased over 86,320 BTC at an average price of $42,000, representing a significant investment of $3.63 billion.
Market experts like Ali Martinez suggest that these institutions are taking a strategic, long-term view rather than making top purchases. This level of institutional investment highlights Bitcoin's growing recognition as a legitimate asset class and signals confidence in its long-term growth potential.
The daily chart shows the sell signal from BTC’s super trend indicator. Source: BTCUSDT on TradingView.com
Currently, Bitcoin price is at $38,800, reflecting a significant decline of over 12% year-to-date and a 9.7% decline in the last seven days. The duration and extent of the selling pressure caused by Grayscale's BTC dump remains uncertain, leaving the question of how much further the BTC price could fall.
Featured image from Shutterstock, chart from TradingView.com
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