The approval of the Spot Bitcoin ETF was a significant event in the cryptocurrency market. It not only made history in the financial sector but also brought a sense of acceptance to the market. Eleven Spot Bitcoin ETFs were approved on January 11, but while this brought excitement to the market, it also brought news of a “sell-off.” The approval spiked the price of Bitcoin to the $49,200 mark, initiating a bull run in the market. However, this bull run was short-lived.
The cryptocurrency market has been bleeding, declining from $49,000 to below the $40,000 support level. Since the beginning of the week, the Grayscale Bitcoin Trust (GBTC) has played a significant role in the Bitcoin sell-off, witnessing substantial outflows that have led to selling pressure in the market. Since January 11, GBTC has sold over $4.4 billion worth of Bitcoin over the past nine trading days. According to BitMex, on Monday, GBTC sold Bitcoin worth $640 million. On January 24th, GBTC recorded an outflow of $429 million, while today, GBTC recorded an outflow of $425 million. This series indicates a decline in outflows, and if the decline in GBTC outflows continues, a bull run might be witnessed.
Bloomberg ETF analyst Eric Balchunas tweeted that GBTC is experiencing a downtrend in Bitcoin outflows, recording an outflow of 106,092 Bitcoins since it was approved as a Bitcoin ETF exchange. GBTC currently holds 550,000 Bitcoins in its store, and so far, it has only sold 106,092 Bitcoins. Although GBTC outflows are declining, we are uncertain about GBTC’s next move.
Signs of Hope in the BTC Market
At the time of writing, Bitcoin was trading below the $40,000 support level. However, a potential bull run could be witnessed if the Bitcoin market can surpass the $40,500 resistance level. Currently, the market has found new support at $38,200 and $38,500. The market is currently experiencing fluctuating highs and lows at this level, attempting to recover from this new support.
If the market experiences a surge in recovery above the $40,500 level, it could rise to $42,500, although the market might encounter significant resistance above the $41,500 mark. GBTC is the primary reason behind the selling pressure, but as we observe the decline in outflows, the market could make a significant surge, leading to a bullish trend.