May 29, 2024
Bitcoin at $41,252 Faces ETF Impact and Metric Concerns
Bitcoin price today

Bitcoin at $41,252 Faces ETF Impact and Metric Concerns

Friday, January 26, 2024: Early in the day, the Bitcoin price was recorded at $41,252.40. The battle to maintain the $40,000 level for Bitcoin (BTC) continues, and analysts are closely monitoring key levels for potential bullish momentum. The price of Bitcoin recently faced a notable downturn, reaching $38,500, attributed to the debut of the United States’ first spot Bitcoin exchange-traded funds (ETFs). Despite significant inflows since their January 11 launch, these ETFs coincided with a 20% decline in BTC/USD.

The Grayscale Bitcoin Trust (GBTC) conversion to an ETF is considered a contributing factor, allowing long-term investors to exit and adding to selling pressure. Large quantities of BTC were moved from Grayscale to Coinbase. Still, critics argue that this might not be the primary driver of Bitcoin’s descent, pointing to FTX exchange sales and derivatives liquidations.

On-chain metrics, particularly the Advanced Network Value to Transaction (NVT) Signal, suggest the recent BTC price is meager, introducing complexity to market dynamics. Coin movements by long-term holders during this decline raise concerns about a potential deepening of the bearish trend. The NVT Signal, which compares the total value of transactions over a 90-day lookback period to the Bitcoin market cap, indicates oversold conditions.

The involvement of the United States in the cryptocurrency market, with the introduction of spot Bitcoin ETFs, has brought both opportunities and challenges. The ongoing battle around the $40,000 level reflects the market’s uncertainty and the impact of various factors, including ETF-related developments and on-chain metrics. Traders and investors closely watch key support and resistance levels for potential shifts in Bitcoin’s price trajectory.

Image by fabrikasimf on Freepik

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