- Coinbase's premium index was negative, indicating strong selling pressure from US investors.
- Derivatives traders went short on Bitcoin.
Bitcoin [BTC] At the time of writing, the ETF was hovering in the $41,000 range, contrary to market participants' high expectations following the launch of spot ETFs in the US
Grayscale outflows cause downside for BTC
Using data from CoinMarketCap, AMBCrypto found that the king coin was down 14% from its high of $48,000 on the day regulators approved spot ETFs for trading.
Bitcoin's plunge was blamed on billions in outflows from the Grayscale Bitcoin Trust (GBTC), which has now been converted into a spot ETF.
According to CryptoQuant, almost 52,000 Bitcoins were redeemed from the trust in the last four days, worth $2.1 billion at current market prices.
While experts describe this as a shift of funds to cheaper spot ETFs, it is possible that many GBTC shareholders benefited from Bitcoins that they previously did not have access to.
Source: CryptoQuant
More pain ahead?
The result – significant downward pressure on the Bitcoin price. In fact, analysts at 10x Research predicted that Bitcoin could fall below $40,000 by the end of January, with support developing at $38,000.
This may seem true considering Grayscale still holds more than 566,000 Bitcoin in its possession.
A look at Coinbase’s Premium Index chart adds more credence to the bearish prediction. The negative readings indicated strong selling pressure from US investors.
Source: CryptoQuant
The bearish narrative is getting stronger
AMBCrypto then turned to Bitcoin’s technical indicators to take stock of its near-term prospects.
The Relative Strength Index (RSI) was below the neutral level of 50, indicating that the bears were in control.
The Moving Average Convergence Divergence (MACD) indicator moved in negative territory with the signal line remaining above the MACD line. With no immediate possibility of a bullish crossover, the bears are likely to remain in control.
Source: Trading View
Read Bitcoins [BTC] Price prediction 2024-25
The extent of the downtrend was also observed from the active positions for the king coin.
According to Coinglass, the number of bearish short positions for Bitcoin has overtaken bullish long positions in recent days. This meant that most traders expected Bitcoin to decline further in the coming days.
Source: Coinglass
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