bitcoin price has experienced a phase of stagnation in recent days, leaving investors and analysts searching for the underlying causes. Three key factors can be considered instrumental in explaining bitcoin's current sideways trading trend:
Number One ETF Inflows Offset by GBTC Sales, But for How Much Longer?
bitcoin spot ETFs remain the dominant theme in the market, and Grayscale in particular, with its GBTC, remains the focus of analysts. While ETF inflows continue to break records, the price of bitcoin remains stable. One of the main reasons for this is probably capital outflows into GBTC, which other issuers consider overvalued with its 1.5% annual fee (up from 0.25%).
Thomas Driver of Apollo he pointed the important flow discrepancies in the market: “In three trading days. IBIT +16,000 btc, FBTC +12,000 btc, BITB +6.7,000 btc, ARKB +5.3,000 btc, GBTC -27,000 btc. GBTC btc is flowing, but not enough to sustain the other ETFs. Incoming offer shock in my opinion.”
Alessandro Ottaviani provided More information, stating: “bitcoin inflow into ETFs: +47k, Grayscale bitcoin outflow: -27k, net inflow: 20k. (…) Sooner or later I expect the grayscale output to stop or reduce significantly. Those who hold GBTC Grayscale were already interested in bitcoin and therefore I believe they have already made the decision to sell, the execution of which should occur not long after the ETF launch.
Bloomberg analysts James Seyffart and Eric Balchunas wait a portion of GBTC exits to migrate to other bitcoin exposures, highlighting the complexities of fund accounting and settlement delays in tracking these movements. They noted: “GBTC has surpassed $1.1 billion in outflows… We expect a significant percentage of those assets to return to bitcoin exposure, primarily other ETFs.”
#2 Sale of bitcoin miners
Ali Martínez has highlighted the intensification of sales activity by bitcoin miners as another factor influencing the current price stagnation. Recent on-chain data indicates that miners have significantly increased their bitcoin sales.
Martinez commented on
Notably, the change in miner behavior is consistent with historical trends, where miners sell their holdings to manage cash flow or capitalize on price increases during market rallies.
#3 Consolidation phase after ETF Mania
The market is currently in a consolidation phase after the euphoria surrounding bitcoin ETFs, which led to an 82% rally. This phase is considered natural and reflects historical patterns seen in other markets, such as the first gold ETF.
Although gold initially recorded an increase of around 6%, it then took nine full months to start the real rally, which almost quintupled the price. The same goes for bitcoin ETFs. It will take some time before the asset managers' marketing machinery gets going and new institutional investors can be convinced of the new asset class.
Analyst bias provided a technical perspective, indicating, “btc 4H: Remains flexible until trends are confirmed, however, it doesn't look good for bulls without a recovery from 4H 200EMA and RSI below 50. Yearly open remains very important for risk-reward general. The above is good with bullish confirmations. Below is bad for risk and, with bearish confirmations, leads to a downtrend (hedging mode). Fundamental area for the trend 1H – 4H ~ $42.5K”
At the time of publication, btc was trading at $42,684.
Featured image created with DALL·E, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent NewsBTC's views on whether to buy, sell or hold investments, and investing naturally carries risks. It is recommended that you conduct your own research before making any investment decisions. Use the information provided on this website at your own risk.
