Bitcoin Price at Crossroads : Awaited Surge Hinges on Grayscale Bitcoin Trust’s Full Liquidation
The crypto market is witnessing a notable downturn in Bitcoin prices, with the world’s largest cryptocurrency facing selling pressure and dropping by an additional 2.72% to $40,766. This trend is attributed to strong selling activity by Grayscale Bitcoin Trust (GBTC) following a recent GBTC share sale. However, the funds from the liquidation are swiftly flowing into newly launched Bitcoin ETFs, accumulating over $27 billion within a week.
Such a big event calls for a bigger debate, like whether Bitcoin is priced in or out.
ETFs vs. GBTC: Where Are Investors Heading? Experts’s Insight
Crypto analyst Chris J Terry predicts a continued flat or downward trend in Bitcoin prices until the completion of GBTC’s liquidation, expecting approximately $25 billion worth of selling activity in the coming weeks. Terry criticizes Grayscale’s decision to maintain high ETF fees at 1.5%, considering it a strategic error with potentially lasting consequences on the market and broader adoption.
Grayscale CEO Michael Sonnenshein disagrees with the assessment, countering that high GBTC fees are not driving strong liquidations. On the other hand, Galaxy Digital CEO Mike Novogratz anticipates some selling activity in GBTC but believes investors will transition to other ETFs, particularly endorsing $BTCO. Novogratz sees this development as making it easier for older investors (boomers) to enter the crypto market and notes the opportunity for increased leverage with 4×5 times exposure to Bitcoin through $BTCO.
Despite short-term market challenges, Novogratz remains optimistic about Bitcoin’s future, foreseeing the current issues subsiding and Bitcoin’s value seeing an upward trajectory in the next six months.
In this regard, Julio Moreno from CryptoQuant argues otherwise. According to him, there were significant outflows following GBTC’s conversion to an ETF, but investors moving to lower-fee ETFs balanced the equation.
In simple terms, while GBTC sold about 60,000 Bitcoins, other Bitcoin ETFs purchased around 72,000 Bitcoins, countering the impact of GBTC’s sales. He blames Bitcoin’s price instability on short-term traders and whales who sold after last year’s ascent, saying the ETF approval may be a “sell-the-news” event.
What does on-chain data say about BTC price?
An analysis by On-chain College highlights the importance of the Bitcoin 111-day moving average in Pi Cycle analysis, overlaying it with the short-term holder cost basis for BTC. As Bitcoin experiences range-bound trading, the narrowing gap between these indicators suggests a critical level to monitor at $37.7K to $38.1K.
This level provides insights into potential support or resistance dynamics based on the convergence of key indicators, offering a nuanced perspective on the current market situation.
