- Bitcoin’s value has crashed to below $39,500 despite the presence of crypto ETFs.
- IntoTheBlock uncovered $2 billion in net deposits into centralized exchanges.
- Bitcoin is reportedly experiencing a temporary setback rather than entering a bearish market.
The market has been bearish for weeks, but the trend reached a new peak, with Bitcoin plummeting below $39,500 in the last 24 hours. This trend contradicts the crypto market’s expectations, as many believed the crypto ETFs would propel Bitcoin to new heights.
Multiple events have unfolded since the approval of Bitcoin ETFs on January 10, which may explain the current market condition. Some market observers suggest the emergence of a sell-the-news trend, while others attribute it to significant sell-offs initiated by institutional investor Grayscale.
Meanwhile, the market intelligence firm IntoTheBlock elaborated on the development based on on-chain data. A notable observation was the continuous weeks of inflows into centralized exchanges (CEXs). IntoTheBlock revealed that CEXs experienced a consistent influx of Bitcoin for six consecutive weeks, with nearly $2 billion in net deposits recorded since December.
Usually, sustained trends of deposits into CEXs signify sell-offs, as these platforms provide a direct pathway to fiat currency. However, a crucial question arises concerning the identity of the specific entities exerting selling pressure on the Bitcoin market.
The intelligence firm suggested that Bitcoin tokens held for an extended duration have started circulating, coinciding with the average holding time of transacted Bitcoin reaching an all-time high last Monday. The firm attributed this renewed outflow to individuals exiting the Grayscale Bitcoin Trust (GBTC).
According to reports, the bankrupt FTX trading platform has liquidated approximately $1 billion of its investment in the Grayscale Bitcoin ETF. Moreover, market observers have cited on-chain data indicating Grayscale has moved over $900,000,000 worth of Bitcoin to the U.S.-based exchange, Coinbase.
Nonetheless, IntoTheBlock contended with on-chain data that the current market situation implies that Bitcoin is experiencing a temporary setback rather than entering a bearish trend. It anticipates a resilient comeback for the asset, propelling it back into bullish territory.
Yet, a longstanding technical analyst has argued that Bitcoin could crash to $34,000 before the halving expected in April. The basis for this perspective is the historical pattern where Bitcoin’s price has traditionally been 50% of its preceding all-time high at the time of its next halving.
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