Bitcoin Slips Below $39K as Sell-offs Panic the Market

Market confidence shakes as Bitcoin ETFs see a major setback with Grayscale ETF investors looking at the door.

Mt. Gox throws away bitcoins.
Created by Kornelija Poderskytė from DailyCoin
  • Bitcoin slumped to early December 2023 levels amid a market-wide sell-off.
  • Grayscale Bitcoin Trust shares drop 4% in a day as BTC plunges 10% in a week.
  • Analysts spot one key behavior difference between GBTC & other ETF investors.

The largest digital asset, Bitcoin (BTC), slumped below the $39,000 price range for the first time since December 2, 2023. As the king cryptocurrency continues to crawl behind expectations after the U.S. Securities and Exchange Commission (SEC) approved 11 inaugural Bitcoin exchange-traded funds (ETFs), on-chain whale trackers spotted several large transactions amid Bitcoin’s 5% price drop on Tuesday, January 23, 2024.

Flopping by over 20% since the landmark decision was made, Bitcoin has to deal with a projected $3 billion sell-off caused by Grayscale’s GBTC investors exiting the market. To date, $640,000,000 in outflows have been recorded, while smaller-cap ETFs like BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund have been performing in the opposite direction.

The tendency was first spotted by Bloomberg’s Chief ETF Analyst Eric Balchunas, who claimed that Grayscale Bitcoin ETF investors tend to exit their holdings at lower prices than the rest. Bitcoin dropped 9% since the insight was posted on X.

The Ghost of FTX Sends Shockwaves Through BTC

As a bearish plot twist, the fallen crypto exchange FTX Estate sold over $1 billion in Bitcoin since the court granted permission to sell GBTC shares to pay off debt. This could have significantly contributed to the crypto meltdown this week, as Grayscale’s ETF holdings dominate 50% of the overall market in terms of trading activity.

In another bankrupt exchange sell-off, Mt. Gox has been granted permission to pay off debt with 142,000 BTC held in the company’s treasury. The news was announced by the Chinese blockchain journalist Colin Wu, who stated the bankrupt Japanese exchange’s clients received an email from Mt. Gox.

Next Key Level to Watch for Bitcoin

Amid the jittery crypto market sentiment, crypto analysts are marking the bottom of Bitcoin’s downward spiral with technical analysis. Chart analyst Titan Of Crypto argues that Bitcoin heading to retest $36,000 is likely since it stands as the lower resistance line in the geometric Kumo Cloud, a technical pattern showcasing the $36,000 price range as the nearest strong support line for BTC. At press time, BTC trades at $38,759, according to CoinGecko.

On the other hand, professional crypto analyst Ali Martinez doesn’t see Bitcoin dropping more than 20%, according to the sentiment cycle repeating itself several times since “temporary setback before the continuation of the uptrend,” notes the analyst.

On the Flipside

  • Despite the turmoil on blockchain-related social media, the current Crypto Fear & Greed Index remains neutral at 50.
  • Excluding Grayscale, all other Bitcoin ETF investors made an 86,320 BTC investment worth $3.63 billion at an approximate price of $42,000.

Why This Matters

Large corporations selling their Bitcoin holdings add selling pressure to retail investors.

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This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Tadas Klimasevskis

Tadas Klimaševskis is a Lithuanian journalist at DailyCoin, specializing in covering the lighter side of the crypto industry such as memecoins and pop culture in the metaverse. He has experience as a music artist, English language teacher, and freelance writer, and uses his creative writing skills to summarize valuable information in his work. He is also a strong believer in the potential of blockchain and spends his free time listening to music, traveling, and watching basketball games.