Bitcoin Dips Below $40,000 Amid Spot ETF Turbulence, But Outflows Expected to Slow
Summary:
Bitcoin (BTC) dropped below the $40,000 mark following a subdued start to the U.S. trading session on January 25th. The dip was attributed to the existing climate in spot exchange-traded funds (ETFs). Outflows from the Grayscale Bitcoin Trust (GBTC) saw a slight decrease from the preceding levels, recording around 13,000 BTC. Notable trader Daan Crypto Trades stated that these high outflows are expected to gradually decline over the upcoming weeks. Despite this, overall net flows still remained positive, crossing $824 million, with Bloomberg analyst Eric Balchunas touting the success of $ARKB and $BITB crossing half a billion as noteworthy. The current liquidity block near BTC's spot price potentially signals an impediment to any further decrease in BTC value.
Bitcoin (BTC) dipped below the $40,000 benchmark following the commencement of trading on Wall Street on January 25th, as the cryptocurrency's value experienced considerable support pressure. The start of the trading session in the United States saw minimal enthusiasm with BTC/USD unable to make significant strides in recovering from earlier losses.
The underperformance was largely attributed to prevailing conditions in the spot exchange-traded funds (ETFs), which are currently in their third week of trading. The Grayscale Bitcoin Trust (GBTC) saw a withdrawal of roughly 13,000 BTC on the day, representing a slight decrease from previous numbers.
Citing figures from Bloomberg Intelligence analyst James Seyffart, Daan Crypto Trades, a notable trader suggested that the high outflow would eventually taper off over the coming weeks. Seyffart's figures pointed to January 24th as the day with the highest single-day net outflows for ETFs, totaling close to $160 million.
Despite the outflows, Eric Balchunas, another Bloomberg analyst, noted that the overall net flows were still positive crossing more than $824 million. Balchunas also highlighted the remarkable achievement of $ARKB and $BITB crossing half a billion in the inaugural month, a feat worth noting.
Material Indicators, a trading information resource, provided an analysis of Binance's BTC/USDT order book, the leading global exchange. The researchers identified a solid block of bid liquidity just under the spot price, one of the largest to be seen in the past three years.
Keith Alan, the co-founder, asserted that this could potentially prevent any further plunge for the Bitcoin bulls. Although the ETFs were making a lot of "noise", Alan emphasised the significance of this liquidity block.
As a disclaimer, this report does not offer investment advice or recommendations. Investing and trading moves come with inherent risks and individuals should engage in due diligence before making any decisions.
Published At
1/25/2024 7:21:13 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.