- Bitcoin dominance has been gradually bleeding to Ethereum and the altcoin market since the approval of listing and trading spot ETFs in the United States last week.
- Bitcoin’s attempts to rally beyond the resistance around $44k have been weighed down by the heightened whale selling pressure in the past few days led by Grayscale Investments.
One week after the approval of 11 spot Bitcoin exchange-traded funds (ETFs) in the United States, market data shows that a huge trading volume compared to other ETFs debut. Specifically, the spot Bitcoin ETFs registered nearly $10 billion in cumulative trading volume in the first three days, whereas 500 ETFs approved in the United States last year only amassed around $450 in cumulative trading volume.
However, on-chain data shows that Grayscale Investments has accelerated its Bitcoin selling, having registered an outflow of about 8k coins in the past 24 hours leading to Wednesday. Currently, Grayscale’s GBTC holds about 587.5k Bitcoins whereas BlackRock’s IBIT has around 11.45k Bitcoins.
Today is likely to be a net outflow day for the #bitcoin ETFs. Estimating ~$594 million left $GBTC for a total of $1.173 billion in outflows. Most others saw inflows but doubt its enough to offset nearly $600 mln out of $GBTC https://t.co/elD9qkyjj2
— James Seyffart (@JSeyff) January 17, 2024
Bitcoin network has registered heightened on-chain activities fueled by whale traders and miners. According to on-chain data provided by Santiment, Bitcoin saw three of its four largest transactions of 2024 recorded in the past 24 hours. Notably, one of the large transactions involved 11,502 Bitcoins worth nearly $500 million that were deposited to a Coinbase Global wallet by an unknown sender.
Closer Look at Bitcoin Price Analysis
Since the approval of spot Bitcoin ETFs in the United States last week, Bitcoin price has experienced a significant resistance zone around $44k despite the macro bullish outlook that was signaled by the weekly golden cross between the 50 and 200 Moving Averages (MA).
Bitcoin has been signaling an inevitable correction as the weekly chart forms a double top coupled with a bearish divergence on the Relative Strength Index (RSI). This dominance has been forming a reversal pattern with a potential drop below 50 percent in the near term, which could largely open the path for an imminent altcoin rally.
According to a popular crypto analyst based in the Netherlands, Michael van de Poppe, Bitcoin price is likely to drop to the next support level of around $39k in the near term. Notably, the same price target coincides with the 1.68 auto-fib extension.
Bitcoin’s bearish sentiments could be invalidated if the current daily rising wedge consolidations lead to a bullish breakout beyond $50k. In this regard, Bitcoin price could retest the resistance level around $49k before retracing amid the fading spot ETF hype.
#Bitcoin is eager to consolidate within this range, the ETF hype slowly fading away.
The launch of the ETF was one of the best performing launches in terms of net inflow and volume, and will show in the coming years.
Potential resistance at $46K and support at $39-41K. pic.twitter.com/Ggx3cteN3v
— Michaël van de Poppe (@CryptoMichNL) January 17, 2024
Market Outlook
Bitcoin has grown to a respectable asset-class banking unbanked and banked around the world. The recent approval of spot Bitcoin ETFs in the United States has significantly improved Bitcoin’s bullish fundamentals with the fourth halving event less than 97 days away from happening. With more cash inflows expected to flow in Bitcoin’s investment products soon, crypto experts are confident Bitcoin will outshine the precious metals industry soon.
Meanwhile, Bitcoin price has dropped about 6.5% in the past seven days to trade at (check graph below)
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