The introduction of bitcoin (btc) exchange traded funds (ETF) has caused a major sell-off, leading to a sharp drop in the price of bitcoin.
After gaining approval and starting trading on Thursday, the ETFs sparked a “sell the news”, causing the value of bitcoin to plummet from its initial trading price of $46,500 at the time of approval to a low of $43,200 within hours on Friday.
In the last 24 hours, bitcoin, the largest cryptocurrency by market cap, has seen a 7% drop. Its gains over the past 30 days have been limited to just 4%, erasing much of the progress made during that period.
Furthermore, as selling pressure continues to rise following approval, there are signs that bitcoin price may face further downward pressure.
bitcoin price under pressure
CryptoQuant analyst JA Maartunn observed significant sell orders on bitcoin's two-week chart on Wednesday. In particular, three sets of sell orders were placed between $46,100 and $48,000, comprising stacks of 755, 1,031, and 794 btc, respectively.
According According to the CryptoQuant analyst, these patterns are usually associated with market highs, unless these orders are subsequently withdrawn or executed.
This influx of sell orders may help explain the lackluster response to the ETF approvals until now, as it seems that the selling pressure has been increasing. However, the situation has escalated further.
According to Maartunn, additional sales orders were detected on Friday, indicating that the seller is not done yet. Two substantial sell orders have been placed just above the current bitcoin price: one for 894 btc at $44,000 and another for 1,071 btc at $45,100.
These developments suggest that market participants are taking advantage of the ETF news to dump their bitcoin holdings, leading to increased selling pressure and subsequent price declines.
Market stabilization after this period of increased selling pressure remains uncertain. It was believed that the introduction of ETFs would generate greater institutional interest and potentially drive up the price of bitcoin.
However, it is important to note that the impact of these ETFs is expected to play out over the long term, rather than being evident in days, weeks or even months. It will probably take years to fully evaluate the effects and consequences of ETF Integration in the bitcoin market.
bitcoin's bullish structure remains intact
Amid the current selling pressure, several support lines can potentially stop the downtrend and bring positive news for bitcoin price and btc bulls.
Although bitcoin has already lost its support level of $44,000, there is another crucial threshold at $42,700 that could prevent a further decline. If this level holds, there is a chance for bitcoin to reclaim the $43,000 mark and reverse the downward momentum.
If the support at $42,700 is broken, additional support lines come into play. These include $42,300, $41,700 and $41,200, which act as the last barriers before a possible test of the $40,000 support level. The $40,000 mark is important as it represents final support before a possible drop towards $38,000.
However, there is one silver lining that bitcoin bulls should consider. The current bullish structure of the cryptocurrency remains intact as long as the drop does not exceed the $29,900 mark.
This level marked the beginning of the current bullish trend and its preservation would ensure the maintenance of the overall positive market structure.
Featured image from Shutterstock, chart from TradingView.com
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