Bitcoin Price Slides Amid Investor Sell-Off and Negative ETF Flows
Summary:
Bitcoin's price has seen a 23% drop from its all-time high in March, descending to a two-month low. Lagging Bitcoin accumulation, increased selling pressure due to profitable Bitcoin addresses, and negative Bitcoin exchange-traded funds flows, particularly from Grayscale's GBTC fund, have all contributed to this decline.
The dominant cryptocurrency, Bitcoin (BTC), has experienced a 23% decline from its highest value of $73,835 achieved on March 14, hitting a two-month minimum of $56,500 on May 1. Market metrics from Cointelegraph Markets Pro and TradingView reveal that Bitcoin has been caught in a descending trend for nearly two months, indicating a potential shift in traders' attitudes as an increasing number are cashing in on their profits.
Despite 'prime buy zones' for late-stage investors that arose with the initial correction following Bitcoin's halving, Glassnode data indicates that Bitcoin accumulation has lagged behind the rate of BTC issuance. Within the last 30 days, investors across all cohorts have acquired just over 10,000 BTC, while during the same timeframe, 19,000 BTC have been issued.
James Van Straten, a top analyst at CryptoSlate, noted that this has happened twice in recent months. The first instance was in March and was succeeded by a 17% BTC dip from March 14 to March 19. The cryptocurrency started to be sold off by all cohorts shortly after the heavy accumulation period that took it to a record peak. This selling trend, confirmed by March's data, has shown no sign of reversal.
Looking at the In/Out of the Money Around Price (IOMAP) chart, over 47.42 million Bitcoin addresses are currently profitable. Consequently, the pressure on the selling side will likely increase as investors look to secure profits, thereby further suppressing the price of BTC.
The trend of investors looking to minimize risk is also apparent among spot Bitcoin exchange-traded funds (ETFs), with data from Farside Investors showing a retraction of capital. While two positive inflow days were recorded, May 7 saw an outflow totalling $15.7 million. Driving this withdrawal was Grayscale's GBTC fund, which saw outflows amounting to $15.7 million despite its first netflows in 78 days occurring on May 3. Meanwhile, other Bitcoin ETFs reported a slowdown in inflows. Specifically, inflows into BlackRock's iShares Bitcoin Trust (IBIT) have been stagnant since April 24, only seeing movement on May 3 and May 6.
This news item does not offer investment advice or recommendations. Every investment or trade carries risk, so readers are encouraged to conduct their own research before making any financial decisions.
Published At
5/9/2024 12:05:01 AM
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