- Bitcoin price is losing momentum after the approval and listing of spot Bitcoin ETFs, experiencing a drop from $48,969 to $40,297.
- Grayscale Bitcoin Trust (GBTC) sold approximately 60,000 Bitcoins, but other 10 spot Bitcoin ETFs operated by BlackRock, Fidelity, Bitwise, among others, collectively bought around 72,000 Bitcoins.
- The Bitcoin sell-off came from holders, including short-term traders and whales, who took advantage of the ‘sell the news’ activity to cash in on the recent rally.
After Spot Bitcoin ETFs received approval from the SEC, the BTC price fell: What are the reasons for this decline?
BTC Price Drops After Approval of ETFs
Bitcoin price is losing momentum after the approval and listing of spot Bitcoin ETFs, experiencing a drop from $48,969 to $40,297. Moreover, there is a significant decrease in trading volume on crypto exchanges. Additionally, there is a story circulating about Grayscale Bitcoin Trust (GBTC) selling Bitcoin assets, but the CryptoQuant team claims that this is not the case and anticipates a short-term correction.
Julio Moreno, the head of research at CryptoQuant, stated that the current Bitcoin price correction is not caused by GBTC selling Bitcoin assets, and there is a false narrative circulating in the market. Grayscale Bitcoin Trust (GBTC) sold approximately 60,000 Bitcoins, but other 10 spot Bitcoin ETFs operated by BlackRock, Fidelity, Bitwise, among others, collectively bought around 72,000 Bitcoins. This shows that the inflow has indeed increased, and the trading volume is surpassing billions.
The Bitcoin sell-off came from holders, including short-term traders and whales, who took advantage of the ‘sell the news’ activity to cash in on the recent rally. According to CryptoQuant’s views, “Several On-Chain metrics and indicators still show that the price correction may not have ended or at least a new rally is still possible. Short-term traders and large Bitcoin holders continue to sell significantly in a risk-averse stance. Also, unrealized profit margins haven’t dropped to a level that could be said sellers are exhausted.”
Renowned analyst CredibleCrypto mentioned that the net positive ETF flows were +5,000 Bitcoin purchases, which is 10 times the impact of the halving effect. However, the recent price action does not seem to reflect this. This definitely proves that there are other more significant factors at play with a larger impact on short/medium-term price action.
Short-Term Correction Expected for BTC Price
Ki Young Ju, the founder and CEO of CryptoQuant, stated in a post on January 20 that Bitcoin is not entirely distributed to retail investors in the distribution phase. He points out a short-term correction in BTC price after the recent 15% drop in the last few days. However, he added that the long-term bull market cycle will continue until Bitcoin is entirely distributed to retail investors. The long-term outlook remains positive.
The BTC price is currently trading at $41,740, showing a 0.15% increase in the last 24 hours. The 24-hour low and high values are $40,297 and $42,134, respectively. Also, the trading volume has decreased by 16% in the last 24 hours, indicating reduced interest among traders.
