Here’s Why Bitcoin (BTC) Price Drops After Spot Bitcoin ETFs: CryptoQuant
Bitcoin price lost its strength after spot Bitcoin ETFs were approved and listed on exchanges, dropping over 15% from $48,969 to $40,297. In a paradigm shift, trading volumes on crypto exchanges have dropped significantly.
There is also a rumor in the market that Grayscale Bitcoin Trust (GBTC) is selling its Bitcoin assets, but the CryptoQuant team suggests that this is not actually the case. They also predict a short-term correction.
Bitcoin Sale by Owners
CryptoQuant head of research Julio MorenoHe said there is a false narrative circulating in the market that the current Bitcoin price correction is due to GBTC selling its Bitcoin assets.
Grayscale Bitcoin Trust (GBTC) sold approximately 60 thousand bitcoins, but the total net purchase of 10 other spot Bitcoin ETFs such as BlackRock, Fidelity, Bitwise was approximately 72 thousand bitcoins. This shows that inflow is indeed increasing, with trading volumes exceeding billions.
Bitcoin sales came from holders, including short-term traders and whales. They took advantage of the “sell the news” phenomenon to profit from the recent rally.
“Many on-chain metrics and indicators indicate that the price correction may not be over, or at least a new rally is still not on the cards. Short-term traders and large Bitcoin holders are still making significant sales in the context of risk aversion. Additionally, according to CryptoQuant’s insights, unrealized profit margins have not fallen enough for sellers to burn out.
Popular analyst TrustedCrypto He noted that hard data proves ETF flows have been net positive, with +5,000 Bitcoin purchased per day since launch; This is 10 times the impact of the upcoming halving. But the recent “PA does not seem to reflect this. “This literally proves that there are other, more important factors that have a greater impact on PA in the short/medium term.”
Read More: Spot Bitcoin ETFs See $33.1 Million Inflows on Day 6
BTC Price Will Witness Short-Term Correction
Founder and CEO of CryptoQuant Ki Young Ju In a post on January 20, it was revealed that Bitcoin in the distribution phase had not been fully distributed to retailers. He warns that there may be a short-term correction in BTC price after the 15% correction in the last few days.
But he added that this long-term bull market cycle will continue until Bitcoin is fully distributed to retailers. The long-term outlook remains positive.
BTC price has increased by 1% in the last 24 hours and the price is currently trading at $41,659. The 24-hour low and high are $40,297 and $42,134 respectively. Additionally, the 16% decrease in trading volume in the last 24 hours shows that investors’ interest has decreased.
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Varinder has 10 years of experience in the Fintech industry and has been dedicated to blockchain, crypto and Web3 development for over 5 years. A tech enthusiast and analytical thinker, he has shared his knowledge of disruptive technologies in more than 5,000 news stories, articles, and articles. Varinder believes in the great potential of future innovative technologies with parofix Media. He currently covers the latest updates and developments in the crypto industry.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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