19 January 2024
Bitcoin (BTC), the largest cryptocurrency in the market, has experienced a sharp drop below the $41,000 mark as exchange-traded funds (ETFs) for Bitcoin went live on January 12.
The subsequent profit-taking, selling pressure, and outflows from Grayscale’s Bitcoin Trust ETF (GBTC) played a significant role in the downward trend.
Grayscale’s Bitcoin Transfers To Coinbase Intensify
On Tuesday, NewsBTC reported that six days ago, Grayscale initiated the first batch of BTC outflows from their holdings to a Coinbase, totaling 4,000 BTC (approximately $183 million) over six days.
However, the asset manager resumed outflows from the Trust to the exchange on Tuesday, sending an additional 11,700 BTC (equivalent to $491.4 million) to Coinbase.
Furthermore, on Friday, data from Arkham Intelligence revealed that 12,865 BTC ($529 million) were transferred from the Grayscale Trust address to Coinbase Prime.
In total, the Grayscale Trust address has transferred 54,343 BTC ($2.313 billion) to Coinbase Prime during the opening hours of the US stock market over five consecutive trading days since January 12, which has undoubtedly contributed to the downtrend in Bitcoin’s price.
Selling Frenzy Among BTC Miners
In addition to Grayscale’s selling spree, there has been increased selling activity by Bitcoin miners ahead of the upcoming Bitcoin halving.
Crypto analyst Ali Martinez highlights that on-chain data from CryptoQuant indicates a substantial increase in selling activity by BTC miners. In the past 24 hours, miners offloaded nearly 10,600 BTC, with a value of approximately $455.8 million.
The persistent selling pressure has caused BTC to trade at $40,900, reflecting a slight 0.2% decrease over the past 24 hours.
The downtrend has been evident across various time frames, with declines of 5%, 6%, and 7% over the seven, fourteen, and thirty-day periods, respectively. However, despite these recent setbacks, Bitcoin remains remarkably positive year-to-date, with an impressive 98% gain.
Overall, the combined impact of Grayscale’s Bitcoin Trust ETF outflows and increased selling activity by miners has intensified the downward pressure on Bitcoin’s price, breaching the critical support level of $41,000.
The focus now turns to how Bitcoin bulls will defend the crucial $40,000 support level, which stands as the last line of defense before a potential dip toward the $37,700 mark.
Should this support level fail to hold, the Bitcoin market could witness further price declines, potentially pushing the price down to the $35,800 mark. However, with the Bitcoin halving scheduled for April, bullish investors are hopeful that this event will catalyze a significant bull run.
Featured image from Shutterstock, chart from TradingView.com