- 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 Bitcoinโs 5% price drop on Tuesday, January 23, 2024.
Sponsored
Flopping by over 20% since the landmark decision was made, Bitcoin has to deal with a projected $3 billion sell-off caused by Grayscaleโs GBTC investors exiting the market. To date, $640,000,000 in outflows have been recorded, while smaller-cap ETFs like BlackRockโs iShares Bitcoin Trust and Fidelityโs Wise Origin Bitcoin Fund have been performing in the opposite direction.
The tendency was first spotted by Bloombergโs 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 Grayscaleโs 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 companyโs treasury. The news was announced by the Chinese blockchain journalist Colin Wu, who stated the bankrupt Japanese exchangeโs 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 Bitcoinโs 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 doesnโt see Bitcoin dropping more than 20%, according to the sentiment cycle repeating itself several times since โtemporary setback before the continuation of the uptrend,โ 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.
Delve into DailyCoinโs top crypto news:
GMEE Token Confirms $15M Exploit on Polygon Contracts
Ethereum Foundation Adds to Selling Pressure with $1.7M Move
