bitcoin price has been experiencing bitcoin-news/bitcoin-price-suffers-post-spot-etf-blues-drops-7-to-43200/” target=”_blank” rel=”noopener nofollow”>significant downward pressure since the Securities and Exchange Commission approved spot trading of exchange-traded funds in the United States. The leading cryptocurrency fell below $42,000 on Friday, January 12, reflecting a 7% drop in the last 24 hours.
The disappointing price performance of bitcoin since btc spot ETFs began trading has been a major source of concern for cryptocurrency investors and enthusiasts. Anthony Scaramucci, founder of SkyBridge Capital, has weighed in on the possible reasons for the flagship cryptocurrency's struggling price after such a positive development.
Why bitcoin Price Fell Below the $42,000 Mark
In a recent bitcoin-decline” target=”_blank” rel=”noopener nofollow”>interview with Bloomberg, Scaramucci gave his take on why bitcoin price has faced so much downward pressure since btc ETFs began trading in the United States. According to the hedge fund boss, the recent btc price drop was partly caused by sales of Grayscale bitcoin Trust shares.
Scaramucci said many shareholders of Grayscale bitcoin Trust (GBTC), which also recently converted to a spot exchange-traded fund, were selling at losses and switching to alternatives with lower fees. GBTC recorded approximately $2.3 billion in trading volume on Thursday, marking the bitcoin/bitcoin-price-stalls-record-etf-day-heres-why/” target=”_blank” rel=”noopener nofollow”>Highest first-day turnover for an ETF.
Additionally, the founder of SkyBridge Capital mentioned that the bankrupt crowd of the now-defunct FTX exchange has been selling their bitcoin in recent days. Scaramucci said during the interview:
The second thing we are seeing is that the assets from the FTX bankruptcy are being unloaded in the ETF announcement.
On a much more positive side, Scaramucci anticipates that the situation will change for the price of bitcoin in the coming trading days. The founder noted:
There is currently a large volume of bitcoin sales. I expect the oversupply to be resolved in the next six to eight business days.
bitcoin Trading Volume Hits 15-Month High
Unsurprisingly, bitcoin has attracted interest from traders since the approval of exchange-traded funds that track the cryptocurrency. According to a report by Santiment, the coin's trading volume recently rose to its highest level since the FTX collapse in November 2022.
Meanwhile, bitcoin open interest rates for Binance perpetual contracts rose by more than $426 million on Friday. This represents the highest level on the world's largest crypto trading platform since January 1, 2024, according to Santiment.
While these positive developments could have been followed by a surprising drop in bitcoin price, the current FUD (Fear, Uncertainty and Doubt) in the market could indicate a possible price reversal.
<img decoding="async" class="aligncenter size-medium" src="https://technicalterrence.com/wp-content/uploads/2024/01/Here39s-Why-Bitcoin-Price-Dropped-Below-42000-Following-ETF-Approval" alt="bitcoin price” width=”2174″ height=”1434″/>
bitcoin price sits above $43,000 on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from Shutterstock, chart from TradingView
