bitcoin (btc), the largest cryptocurrency on the market, has seen a sharp drop below the $41,000 mark as exchange traded funds (ETF) for bitcoin were launched on January 12.
Subsequent profit taking, selling pressure, and capital outflows from Grayscale's bitcoin Trust ETF (GBTC) played a major role in the downtrend.
bitcoin transfers from Grayscale to Coinbase intensify
On Tuesday, NewsBTC reported That six days ago, Grayscale initiated the first batch of btc outflows from its holdings to 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.
Also, on Friday data from Arkham Intelligence revealed that 12,865 btc ($529 million) was transferred from the Grayscale Trust address to Coinbase Prime.
In total, Grayscale Trust management has transferred 54,343 btc ($2.313 billion) to Coinbase Prime during US stock market opening hours for five consecutive business days since January 12, which has undoubtedly contributed to the downward trend in the price of bitcoin.
Selling frenzy among btc miners
In addition to the Grayscale selloff, bitcoin miners have increased selling activity ahead of the upcoming bitcoin halving.
Cryptographic analyst Ali Martínez reflexes that CryptoQuant on-chain data indicates a substantial increase in selling activity by btc miners. In the last 24 hours, miners downloaded almost 10,600 btc, worth approximately $455.8 million.
Persistent selling pressure has caused btc to trade at $40,900, reflecting a slight decline of 0.2% over the past 24 hours.
The downward trend has been evident over various time periods, with drops of 5%, 6% and 7% over the seven, fourteen and thirty day periods respectively. However, despite these recent setbacks, bitcoin remains remarkably positive so far this year, with an impressive 98% gain.
Overall, the combined impact of Grayscale's bitcoin Trust ETF outflows and increased selling activity by miners has intensified downward pressure on the price of bitcoin, breaking the critical support level of $41,000.
Attention now turns to how bitcoin bulls will defend the crucial $40,000 support level, which represents the last line of defense before a possible fall towards the $37,700 mark.
If this support level does not hold, the bitcoin market could witness further price declines, which could push the price towards 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
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