Bitcoin Aims to Break $52,000 Barrier Amid Dense Market Resistance and ETF Flux
Summary:
Bitcoin (BTC) strives to break through a dense resistance as it targets the $50,000 price tag, says analyst Cole Garner. Despite a recent dip due to unexpected U.S inflation data, Bitcoin has reversed its losses and hit a new two-year high. However, a reshaped liquidity landscape could hinder the market from breaking $52,000. Garner hints at a tug-of-war between sellers and U.S. Spot Bitcoin Exchange-Traded Funds (ETFs), despite ETFs consuming more BTC than supplied by block subsidies. Meanwhile, ETFs witness substantial inflows and reduced outflows from the Grayscale Bitcoin Trust (GBTC) back the trend.
Bitcoin (BTC) is in the throes of a fresh conflict to prevail over the "dense" resistance as it zeroes in on the $50,000 price range. A well-known analyst, Cole Garner, highlighted the cryptocurrency exchange Bitfinex in an X (formerly Twitter) thread.
The Bitfinex entity has popped up on the radar as ask liquidity balloons despite a near 4% dip on February 13 caused by unexpected U.S. inflation data. Nevertheless, Bitcoin not only overturned its losses but also registered a new two-year peak. Prior to the February 14 opening of Wall Street, BTC/USD has nudged the $52,000 point into view, according to data drawn from Cointelegraph Markets Pro and TradingView.
However, market observers are aware of a caveat. A reshaped liquidity environment imposes a hurdle for the bulls, potentially keeping the market shackled beneath $52,000. Garner encapsulated the scenario by commenting on the "Brick wall of asks on Bitfinex. Densely packed all the way up to $52.3."
The market dynamic of push and pull may get influenced by the ETF flows, but Bitfinex has been replanting the wall faster than demand can whittle it down, causing prices to merely ricochet off instead of breaking through.
Garner's remark referred to the arm wrestling between sellers and the spot demand arising from newly commissioned U.S. spot Bitcoin exchange-traded funds (ETFs). Presently, a flood of liquidity is being witnessed in the critical $50,000 region, despite ETFs consuming BTC in higher volumes than those created by block subsidies.
Garner said, “This is one entity. A distinct signature. We've seen this behavior many times. They walked the entire market from $3k-$10k in 2020. I've never seen them replenish in real-time. This is new behavior."
The spotlight is on Bitfinex and its affiliated entity, the stablecoin producer Tether. Earlier, the volume of Bitfinex whale traders' transactions significantly impacted the spot prices. However, the liquidity provider's identity remains a mystery.
ETFs on February 13 saw substantial inflows, exceeding $600 million, with nearly half a billion dollars accounted for by BlackRock’s product alone.
Backing the trend is declining outflows from the Grayscale Bitcoin Trust (GBTC), currently only a fragment of their daily peak marked in January.
Thomas Fahrer, CEO of Apollo, a crypto-focused review portal, commented, "Even as GBTC loses less Bitcoin now, these new funds keep buying just as much...This means the new ETFs attracting fresh money to invest in Bitcoin, not just the same old investors moving their money around."
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Published At
2/14/2024 12:29:52 PM
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