Bitcoin's Recent Decline Mirrors U.S. ETF Launch Behavior: A Price Surge on the Horizon?
Summary:
The recent decrease in Bitcoin value exhibits similar traits to its performance after the U.S. ETF launch earlier this year, prompting some crypto traders to forecast an increase soon. Despite the introduction of Hong Kong's Spot Bitcoin ETF attracting $217 million in net inflows, Bitcoin's price has dropped nearly 7% since. Some traders fear this may not offset the substantial outflows from the U.S., thus potentially impending a similar breakout pattern. Other traders view the price decline as a needed market correction, emphasizing that extended consolidation could lead to a price increase.
Bitcoin's latest dip mirrors its performance after the January launch of the U.S. Exchange-Traded Fund (ETF), prompting some observers to predict a surge next week. On April 30, a Spot Bitcoin ETF was introduced in Hong Kong, amassing $217 million in net inflows, yet, the cryptocurrency's value has dropped nearly 7% since, per CoinMarketCap data. Crypto trader and co-founder of WhereAt Social, Quinten Francois sees a resemblance in this pattern to the U.S. Spot Bitcoin ETF release which saw a 14% Bitcoin price drop within 12 days of the launch before a 7% bounce-back in the subsequent seven days. Quinten Francois anticipates a similar uptick in Bitcoin's value in the next week if this trend prevails.
Cryptocurrency trader StockLizard further stated, "Price adjustment was highly necessary. The route to the top isn't direct."
These two launches had some key distinctions though. Despite the Hong Kong Bitcoin ETFs drawing $217 million in net inflows on their first day, American ETFs saw a flat out $794 million outflow in the same timespan. Furthermore, the first-day trading volume of the Hong Kong-based ETFs was a mere $12.4 million compared to the staggering $4.6 billion of the U.S. Spot Bitcoin ETFs.
The Bitcoin halving, sustained Middle East tensions, the 'sideways' price action period that usually follows a Bitcoin halving, and the extension of the interest rate hold by the U.S. Federal Reserve coincided with the Hong Kong's Bitcoin ETF rollout.
Bloomberg ETF analyst, Eric Balchunas, stated on April 30 that the achievement is notable given Hong Kong's size, which is around 1/168th of the U.S.
However, some traders are worried that the Hong Kong inflow might not compensate for the massive outflows from the U.S., thus hampering a similar breakout pattern. The TOBTC Crypto Trading team claimed "Hong Kong Bitcoin ETFs cannot counterbalance the selling pressure of U.S. ETFs."
Concurrently, a section of traders perceives the recent price drop as a constructive market correction of Bitcoin. Titan of Crypto, a cryptocurrency trader, posted "The extended Bitcoin consolidation will elevate its price to meet the trendline".
CryptoCon, another crypto commentator, also points out the necessity of Bitcoin's recent price correction. Founder of AirBtc, Handre van Heerden, underlines what Bitcoin critics overlook, stating, "We are unconcerned by price drops".
In other news, the launch of Hong Kong's Bitcoin ETF ranks amongst the 'top 20%', and an STRK scam suspect gets caught in Asia Express.
Disclaimer: This write-up does not serve as investment counsel or advice. Every investment and trading step contains a risk, and individuals should carry out their individual research before making any decision.
Published At
5/3/2024 7:04:22 AM
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