According to a Matrixport Research analysis report shared with CryptoPotato on Jan. 26, Bitcoin prices may retest lower support around $36,000 to $38,000 if ETF hype fully unwinds.
However, this would present buying opportunities for investors, according to Markus Thielen, Head of Research at Matrixport.
“Sub-38,000, the ETF hype might be completely priced out and Bitcoin goes back to the tunes of macro and liquidity.” He added, “We would use any further dip to start buying again.”
Bitcoin Selling Pressure Mounts
A correction to $36K would be in the magnitude of around 26%, however, CoinGlass predicted that it could be as much as 30%, which is similar to mid-cycle retracements from previous cycles. This would send prices back to the $34K level before they resumed an uptrend.
Thielen also noted that the recent launch of spot Bitcoin ETFs has been underwhelming so far, with lower-than-expected demand and declining trading volumes.
“It is apparent after two weeks of Bitcoin ETF trading. Institutional investors (and the so-called Boomers) are not biting. Registered Investment Advisors (RIA) have yet to be ready to sell this product. Inflows disappoint, and trading volumes are falling off a cliff.”
Grayscale has been offloading BTC since the rival ETFs were launched on Jan. 11. The asset manager has shed 106,575 BTC worth around $4.27 billion so far this month, according to the ETF holdings tracker provided by CC15Capital.
Daily change in #Bitcoin held by the 🇺🇸 spot ETFs👇
Since 1/9, the new ETFs fully absorbed the $GBTC outflows.$IBIT $FBTC $ARKB $BITB $BRRR $BTCO $HODL $EZBC $BTCW $GBTC $BTC pic.twitter.com/9GyA66kAsR
— CC15Capital 🇺🇸 (@Capital15C) January 26, 2024
GBTC holders appear to be selling and taking profits after Bitcoin’s rally in late 2022 rather than moving into the new ETFs, reducing expected ETF inflows.
“ETFs could still play a significant role in this fifth bull market – but not now,” he said.
BTC Miners Selloff
In addition to the Grayscale selloff, Bitcoin miner reserves have been decreasing since October, according to CryptoQuant.
Miners typically sell before a halving event to lock in higher prices and accrue cash reserves to invest in more efficient hardware. This enables them to keep up with competitors after the block reward is halved, which is estimated to occur on April 22.
Nevertheless, there is no reason to be bearish, said Thielen.
“Even if Bitcoin ETF inflows disappoint, this is not the time to turn bearish as the macro environment will remain a tailwind in 2024, and the US election cycle will see a constructive fiscal response that will lift asset prices higher.”
BTC prices had reclaimed the $40K level during the Asian trading session on Friday, Jan 26.
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