Bitcoin Price Slides below $41K and Spot ETFs hold a total of $95,000 BTC
Bitcoin, the largest cryptocurrency by market capitalization, is down on Jan.22, falling 2% in the last 24 hours to hit $40,960.
BTC/USD daily chart. Source: TradingView
Let’s look at the reasons why BTC is likely to recover in the short term.
Shark and Whale Accumulation
A look at on-chain data reveals that BTC’s ongoing correction may come to an end once the large holders begin stacking up more.
According to market intelligence firm Santiment, the percentage of Bitcoin supply being held by sharks and whales is still “mildly down” compared to October when crypto prices began rallying.
still help trigger another #bullcycle for the #cryptocurrency sector as we saw in October, November, and December. But whale accumulation of these three assets, in particular, would be a key #bullish signal that many traders would welcome as the $BTC halving is now
(Cont) 👇— Santiment (@santimentfeed) January 20, 2024
Santiment added,
“But whale accumulation of these three assets, in particular, would be a key #bullish signal that many traders would welcome as the $BTC halving is now just under 14 weeks away.”
This may not take long to be realized as spot Bitcoin ETFs are accumulating more of this asset. According to the latest data, spot Bitcoin ETFs now collectively hold 95,000 Bitcoin after six full days of trading, with assets under management (AUM) approaching $4 billion.
According to data provided by senior Bloomberg ETF analyst Eric Balchunas, the capital influx into the recently launched ETFs has surpassed the outflows from the Grayscale Bitcoin Trust (GBTC).
Note: the more we think about it and talk to ppl, prob only a small minority of the GBTC outflows are likely going to the Nine right now as much of it was FTX and traders who arb-ed discount. Also the proportionality of the flows to the size of the firm is almost perfect,…
— Eric Balchunas (@EricBalchunas) January 20, 2024
GBTC’s assets under management have decreased by $2.8 billion in the first six days of trading.
Continued accumulation would signal large investors’ belief that the asset will continue rising in the future, which is a bullish sign.
Decreasing BTC transfer to exchanges
More data from Glassnode, an on-chain market intelligence firm, shows that the amount of Bitcoin being sent to exchanges has been decreasing over the last 10 days.
According to the chart below, the total transfer to exchanges has decreased from 134,627 BTC on Jan. 12 to 26,463 on Jan. 21.
BTC Exchange Inflow Volume. Source: Glassnode
A decline in Bitcoin exchange inflow suggests that fewer individuals are opting to deposit their crypto on exchanges. This trend can be interpreted as a positive sign, indicating increased confidence among investors and traders to hold onto their Bitcoin rather than sell it.
Such behavior contributes to the stability of Bitcoin’s supply and potentially supports long-term investment strategies.
The Crypto Fear and Greed index is back in the “greed” zone after dropping to “neutral” last week.
Increasing bullish market sentiment could be a signal for a marketwide recovery. The “greed” value means market participants are hopeful that the market will take a positive turn in the near future.
Bitcoin sits on strong support around the $40,000 zone
From a technical point of view, BTC enjoys robust support on the downside. These are areas defined by the SuperTrend’s green line at $40,595, the 1000-day exponential moving average (EMA) at $39,310 and the 200-day EMA at $35388.
Perhaps the $40,000 buyer congestion zone is Bitcoin’s most important support line. Note that several attempts to pull the price below this point in the recent past have been futile. This level also acts as the last line of defense for Bitcoin at the moment.
BTC/USD daily chart. Source: TradingView
On the positive side, the SuperTrend indicator is still positive since flipping below the price and turning from red to green on Oct. 1. This means that the market conditions still favour the upside.
As such, increased demand from the current levels could see the big crypto rise to confront resistance from the 50-day EMA, which is currently sitting at $42,030. Above that, the next line of resistance would be the $44,000 and $45,000 psychological levels, before the crypto rises to reach the much-awaited $50,000 mark.
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Bitcoin, the largest cryptocurrency by market capitalization, is down on Jan.22, falling 2% in the last 24 hours to hit $40,960.
BTC/USD daily chart. Source: TradingView
Let’s look at the reasons why BTC is likely to recover in the short term.
Shark and Whale Accumulation
A look at on-chain data reveals that BTC’s ongoing correction may come to an end once the large holders begin stacking up more.
According to market intelligence firm Santiment, the percentage of Bitcoin supply being held by sharks and whales is still “mildly down” compared to October when crypto prices began rallying.
still help trigger another #bullcycle for the #cryptocurrency sector as we saw in October, November, and December. But whale accumulation of these three assets, in particular, would be a key #bullish signal that many traders would welcome as the $BTC halving is now
(Cont) 👇— Santiment (@santimentfeed) January 20, 2024
Santiment added,
“But whale accumulation of these three assets, in particular, would be a key #bullish signal that many traders would welcome as the $BTC halving is now just under 14 weeks away.”
This may not take long to be realized as spot Bitcoin ETFs are accumulating more of this asset. According to the latest data, spot Bitcoin ETFs now collectively hold 95,000 Bitcoin after six full days of trading, with assets under management (AUM) approaching $4 billion.
According to data provided by senior Bloomberg ETF analyst Eric Balchunas, the capital influx into the recently launched ETFs has surpassed the outflows from the Grayscale Bitcoin Trust (GBTC).
Note: the more we think about it and talk to ppl, prob only a small minority of the GBTC outflows are likely going to the Nine right now as much of it was FTX and traders who arb-ed discount. Also the proportionality of the flows to the size of the firm is almost perfect,…
— Eric Balchunas (@EricBalchunas) January 20, 2024
GBTC’s assets under management have decreased by $2.8 billion in the first six days of trading.
Continued accumulation would signal large investors’ belief that the asset will continue rising in the future, which is a bullish sign.
Decreasing BTC transfer to exchanges
More data from Glassnode, an on-chain market intelligence firm, shows that the amount of Bitcoin being sent to exchanges has been decreasing over the last 10 days.
According to the chart below, the total transfer to exchanges has decreased from 134,627 BTC on Jan. 12 to 26,463 on Jan. 21.
BTC Exchange Inflow Volume. Source: Glassnode
A decline in Bitcoin exchange inflow suggests that fewer individuals are opting to deposit their crypto on exchanges. This trend can be interpreted as a positive sign, indicating increased confidence among investors and traders to hold onto their Bitcoin rather than sell it.
Such behavior contributes to the stability of Bitcoin’s supply and potentially supports long-term investment strategies.
The Crypto Fear and Greed index is back in the “greed” zone after dropping to “neutral” last week.
Increasing bullish market sentiment could be a signal for a marketwide recovery. The “greed” value means market participants are hopeful that the market will take a positive turn in the near future.
Bitcoin sits on strong support around the $40,000 zone
From a technical point of view, BTC enjoys robust support on the downside. These are areas defined by the SuperTrend’s green line at $40,595, the 1000-day exponential moving average (EMA) at $39,310 and the 200-day EMA at $35388.
Perhaps the $40,000 buyer congestion zone is Bitcoin’s most important support line. Note that several attempts to pull the price below this point in the recent past have been futile. This level also acts as the last line of defense for Bitcoin at the moment.
BTC/USD daily chart. Source: TradingView
On the positive side, the SuperTrend indicator is still positive since flipping below the price and turning from red to green on Oct. 1. This means that the market conditions still favour the upside.
As such, increased demand from the current levels could see the big crypto rise to confront resistance from the 50-day EMA, which is currently sitting at $42,030. Above that, the next line of resistance would be the $44,000 and $45,000 psychological levels, before the crypto rises to reach the much-awaited $50,000 mark.
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