Persistent Selling Pressure from Grayscale Pushes Bitcoin to New Six-Week Low
Summary:
Despite recurring efforts to retest the $40,000 mark, Bitcoin faces persistent selling pressure from Grayscale, causing the cryptocurrency to reach new six-week lows. As Grayscale continues its transition to a spot Bitcoin exchange-traded fund (ETF), outflows have reached 19,250 BTC or $785 million. Despite bearish forecasts, Bitcoin has maintained the $40,000 support level although expectations are increasing for lower levels. Rising bidder interest at $38,500 on Binance's BTC/USDT order book is also noted. All these shifts involve significant risks, calling for individual decision-making.
Despite frequent attempts to retest the $40,000 mark, Bitcoin (BTC) still sees persistent selling pressure from asset manager Grayscale on January 22, as the Wall Street market opens. This trend is reflected in the BTC/USD 1-hour chart by TradingView, showing fresh six-week lows of $40,324 on Bitstamp. Although the BTC's value remained rather constant over the weekend, the ongoing sales from Grayscale Bitcoin Trust (GBTC) is forcing it down as the new week commences, resulting in a decrease in its managed assets.
The decrease is part of continual shifts since GBTC's transition approval to spot Bitcoin exchange-traded fund (ETF). On January 22, outflows reached up to 19,250 BTC, equivalent to $785 million, according to real-time data from the crypto intelligence firm Arkham. However, Alex Thorn, head of research at crypto intelligence firm Galaxy, estimated the daily amount to be approximately $700 million, a slightly higher estimation.
Eric Balchunas, a dedicated ETF analyst from Bloomberg Intelligence pointed out that the sales which are being transacted to custodian Coinbase might be too enormous for other ETF participants to accommodate. Referring to the total amount determined by Thorn, he expressed concerns about its manageability by the nine functioning ETFs.
Although some were content with the progress of the new spot ETF group, with inflows still remaining on the positive side, GBTC still held more than $20 billion in assets; its share price was only at a slight 0.27% discount to BTC spot as of January 19, according to statistics from Bitcoin Treasuries.
Despite the negative forecasts, Bitcoin's pricing stability managed to maintain $40,000 support. Expectations are increasing that this may result in lower levels. The mid-$30,000 zone has been identified as a potential opportunity to increase BTC holdings by several traders.
With respect to standing BTC/USDT orders on the largest global exchange Binance, trade resource Material Indicators noted a rise in bid interest at $38,500. Popular trader Daan Crypto Trades explained that Bitcoin has experienced several significant fluctuations within the first two hours after the US Market opens, likely due to ETF flows occurring at the day's beginning and end.
Arthur Hayes, the former CEO of derivatives giant BitMEX, dubbed BTC/USD as "heavy," joining the group predicting further lows.
Note: This article does not entail any investment advice or recommendations. All investments and trading moves involve risk and require individual research and decision-making.
Published At
1/22/2024 7:49:28 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.