Bitcoin Slides 14% Amid GBTC Outflows, May Dip Below $40k
Bitcoin below $40,000 by end of January?
Bitcoin, the king coin of cryptocurrencies, has been experiencing some turbulence lately. After a high of $48,000 on the day of the spot ETF’s approval, the value has dropped by 14%. Currently, Bitcoin is moving in the region of $41,000. What are the reasons for this development and what can we expect for the future?
Grayscale outflows pressure BTC
A significant factor for Bitcoin’s decline are the billion-dollar outflows from the Grayscale Bitcoin Trust (GBTC), which has now been converted into a spot ETF. According to CryptoQuant, nearly 52,000 Bitcoins worth $2.1 billion have been withdrawn from the trust in the last four days. Experts interpret this as a redistribution of funds to cheaper spot ETFs. However, it is also possible that many GBTC shareholders have realized profits from Bitcoins they previously had no access to.
More pain ahead?
Analysts at 10x Research predict that Bitcoin could fall below $40,000 by the end of January, with support at $38,000. This seems plausible considering that Grayscale still holds more than 566,000 Bitcoin in its custody. A look at Coinbase’s premium index confirms the bearish forecast. The negative values indicate strong selling pressure from US investors.
Bearish narrative strengthens
Bitcoin’s technical indicators confirm the short-term outlook. The Relative Strength Index (RSI) is below the neutral level of 50, suggesting that the bears are in control. The Moving Average Convergence Divergence (MACD) is moving in the negative area, with the signal line remaining above the MACD line. Without an immediate prospect of a bullish crossover, it seems the bears are in control.
The traders’ alignment also reflects the bearish sentiment. According to Coinglass, bearish short positions for Bitcoin have overtaken bullish longs in recent days. This means that most traders expect Bitcoin to continue to fall in the coming days.
Overall, much suggests that Bitcoin could fall below $40,000 by the end of January. As always in the world of cryptocurrencies, however, nothing is certain. So stay up to date and regularly inform yourself about the latest developments.
Sources: CryptoQuant, Coinglass, 10x Research, Coinbase.
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