Home CryptocurrencyAltcoin BTC Price Rebounds from $40.3K Lows as Bitcoin Volumes ‘Decimated’

BTC Price Rebounds from $40.3K Lows as Bitcoin Volumes ‘Decimated’

by SuperiorInvest

Bitcoin (BTC) approached $42,000 at the weekly close on January 21, with time almost up on a bleak week for bulls.

BTC/USD 1-hour chart. Source: TradingView

BTC price awaits new signals

Data from Cointelegraph Markets Pro and TradingView showed that BTC price action stabilized above $41,000 over the weekend. The pair had previously fallen to $40,270 on Bitstamp, its lowest level since December 11.

While it did not generate a major downside, Bitcoin offered little hope to those seeking new highs, with market participants awaiting the weekly close and the return of trading on Wall Street.

“Bitcoin has indeed fallen to the low of the weekly range after turning black at new resistance,” warned popular trader and analyst Rekt Capital on X (formerly Twitter).

“A weekly close below the range low would be bearish and could begin the breakout process.”

Crypto trader Tony maintained the possibility of a trip below $40,000 between now and the April block subsidy halving.

Meanwhile, Joe McCann, founder of crypto fund Ametric, pointed out how little trading volume Bitcoin was now seeing.

“Bitcoin vols have been absolutely decimated after the ETF launch (as expected),” he said. said X subscribers along with data from the Deribit derivatives exchange.

“The spread between implied and realized volume is the widest it has been in a long time.”

BTC 1-week implied volatility vs. realized volatility. Source: Joe McCann/X

‘All eyes on’ GBTC sales

US spot Bitcoin exchange-traded funds (ETFs) continued to be a source of particular interest.

Related: Ethereum Looks to End 18-Month Losing Streak Against Bitcoin

As Cointelegraph reported, they increased their assets under management to nearly $4 billion since their launch on January 11, helping to reduce the impact of the Grayscale Bitcoin Trust (GBTC) sales.

The latter, now an ETF, experienced outflows as a result of both high maintenance fees and the desire of existing investors to withdraw money at par rather than in cash. Previously, GBTC shares were trading at up to a 48% discount to BTC/USD.

GBTC recorded outflows of $1.17 billion since its conversion from a trust to an ETF,” trading firm QCP Capital wrote in its latest market update on Jan. 17.

“This is not surprising as GBTC is trading at a discount since 2020 (as low as -48% in early 2023). This ETF conversion has been a long-awaited opportunity for GBTC holders to exit with its face value. The question is how much more of GBTC’s current $25.4 billion in assets under management will come out.”

QCP added that “all eyes” were on GBTC’s exits in the future.

“The next major crypto events are the BTC halving (mid-April) and potential ETH spot ETF approvals starting in May. Meanwhile, cryptocurrencies could take some direction from macroeconomic events,” he predicted.

This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.

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