bitcoin price has been moving steadily at its current level, but it did not meet general expectations. Following the approval of bitcoin exchange-traded funds (ETFs), market participants were looking forward to potential scenarios.
In these potential scenarios, bitcoin broke through the critical resistance of $48,000 and continued to make new highs, or the cryptocurrency retreated towards $30,000. As usual, the market has avoided pandering to the crowd as btc trades at $42,000.
Is bitcoin Price Ready to Fall?
btc spot ETFs have been influencing the market; Capital flows from these financial products have been used to suppress cryptocurrency. a pseudonym analyst has been following cryptocurrency exchange Coinbase to connect flows with bitcoin price action.
Since its initial launch on January 11, btc flows into Coinbase have increased. This trading venue is key due to its role as custodian in the majority of spot bitcoin ETFs filed with the US SEC.
Thus, asset managers who want to buy or sell btc go to Coinbase. The exchange sees fluctuations in the price of bitcoin in the spot market compared to other exchanges.
As trading volume on Coinbase has increased since the launch of spot bitcoin ETFs, the platform is seeing some of its highest activity. Meanwhile, bitcoin price is trending sideways. The pseudonymous analyst stated:
(…) the offer is coming from somewhere, obviously gbtc and maybe some others like cme futures, anyway the most important thing is that coinbase is still trading at a discount compared to other spot places and that It's very weak, unless you're managing billions of dollars, Fomo can probably wait once Coinbase is dragging the market up instead of slowing sales.
Another crypto analyst echoed these words; The chart below shows that Coinbase Premium Gap indicates strong selling pressure. If history repeats itself, the metric hints at a sharp decline for bitcoin.
In that sense, the analyst recommends “patience” while bitcoin moves sideways and Coinbase Premium Gap signals a possible drop in support.
bitcoin ETFs break record
A Reuters report indicates that spot bitcoin ETFs attracted nearly $2 billion in their first days of trading. BlackRock and Fidelity led these capital inflows and will maintain them depending on their fee structure, says CF Benchmarks CEO Sui Chung, while technology/spot-bitcoin-etfs-draw-nearly-2-billion-first-three-days-trading-2024-01-18/?taid=65a91af87279e300011794ff” target=”_blank” rel=”nofollow”>adding:
Those that charge lower management fees will, unsurprisingly, be more attractive compared to their peers. Brand recognition is another central aspect.
However, these flows have been questioned by several experts, who question the figures. Three days after the ETFs launched, NewsBTC reported $800 million in new inflows according to a report by Bloomberg Intelligence ETF expert Eric Balchunas.
Cover image from Unsplash, chart from Tradingview
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