Key Observations:
- Despite ETF approval, Bitcoin’s price experiences a sharp drop, testing the $38,000 support level.
- Bitfinex whales accumulate 4,230 BTC, indicating a potential shift in market sentiment.
Unexpected Market Response to ETF Approval
Yello Paradisers, Contrary to the crypto community’s expectations, the approval of spot Bitcoin ETFs has not led to an immediate positive impact on Bitcoin’s price. Since the ETF approval on January 11, Bitcoin has seen a significant decline of over 16%, falling below the crucial $40,000 mark. This downturn has brought the cryptocurrency to a critical testing phase at the $38,000 level.
Bitfinex Whales Accumulate Bitcoin
In the midst of this market volatility, data from Datamish reveals that Bitfinex whales have been steadily increasing their Bitcoin long positions since November 2023. This accumulation, amounting to approximately 4,230 BTC since January 17, marks a notable shift in whale activity on Bitfinex, contrasting with the decline observed last November.
Grayscale’s Influence on BTC Price
The recent downturn in Bitcoin’s price can be partially attributed to increased selling pressure from miners and Grayscale. Grayscale, in particular, has intensified its Bitcoin sell-off since the commencement of ETF trading. The transfer of a substantial 69,994 BTC from the Grayscale Trust address to Coinbase has played a significant role in shaping market dynamics.
Liquidation Zones and Market Impact
CoinGlass’ liquidation heatmap shows the impact of Grayscale’s sell-off, with significant liquidation zones being cleared in the 1-week chart. However, the growing accumulation of BTC long positions on Bitfinex suggests a potential change in market sentiment, hinting at a possible price reversal if the $38,000 support holds.
Institutional Investment in Bitcoin
Excluding Grayscale, other institutional investors and asset managers involved in the ETF market have collectively acquired over 86,320 BTC at an average price of $42,000. This investment, totaling around $3.63 billion, reflects a strategic, long-term approach to Bitcoin and underscores its recognition as a legitimate asset class.
Current Bitcoin Market Status
As of now, Bitcoin is trading at $38,800, indicating a significant year-to-date decline and a 9.7% drop over the past week. The extent and duration of the selling pressure from Grayscale’s BTC dump remain uncertain, raising questions about the future trajectory of Bitcoin’s price.
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