- Coinbase’s Premium Index was negative, indicating strong selling pressure from US investors.
- Derivatives traders shorted Bitcoin.
Bitcoin [BTC] hovering around $41,000 at the time of writing, contrary to the high expectations market participants had after the launch of spot ETFs in the US.
Grayscale outflows cause downsides for BTC
The king coin fell 14% from a high of $48,000 on the day regulators certified spot ETFs for trading, AMBCrypto noted using CoinMarketCaps facts.
Bitcoin’s slump was attributed to billions in outflows from Grayscale Bitcoin Trust (GBTC), which has now been turned into a spot ETF.
According to CryptoQuant, nearly 52,000 Bitcoins have been exchanged at the trust in the past four days, amounting to $2.1 billion at current market prices.
While experts call this the reallocation of funds to cheaper spot ETFs, it is possible that many GBTC shareholders benefited from Bitcoins they previously did not have access to.
Source: CryptoQuant
More pain ahead?
The result: significant downward pressure on Bitcoin’s price. Analysts even 10x Research predicted that Bitcoin could fall below $40,000 by the end of January, while support would develop to $38,000.
This may seem true as Grayscale still holds over 566,000 Bitcoin.
A look at Coinbase’s Premium Index chart gave more credence to the bearish forecast. The negative values indicated strong selling pressure from US investors.
Source: CryptoQuant
The bearish narrative is getting stronger
AMBCrypto then turned to Bitcoin’s technical indicators to take stock of its short-term prospects.
The Relative Strength Index (RSI) hovered below the neutral level of 50, implying that the bears were in control.
The Moving Average Convergence Divergence (MACD) indicator moved along the negative territory, with the signal line remaining above the MACD line. With no immediate possibility of a bullish crossover, it was likely that the bears would remain in control.
Source: trading view
Read Bitcoin’s [BTC] Price forecast 2024-25
The extent of the bearishness was also observed through the active positions taken for the king coin.
According to Coinglass, the number of bearish short positions for Bitcoin has overtaken bullish long positions in recent days. This meant that most traders expected Bitcoin to fall further in the coming days.
Source: Coinglass
