The first quarter of 2024 has delivered a rollercoaster ride for Bitcoin investors, marked by a historic event as the U.S. Securities and Exchange Commission (SEC) greenlit the trading of 10 spot Bitcoin Exchange-Traded Funds (ETFs) in U.S. marketplaces. The approval sent BTC prices soaring to a new multi-year high of $49,102, only to face an 18% downturn over the weekend, plunging to fresh year-to-date lows at $40,236.
In the aftermath of this significant development, discussions among Bitcoin holders abound, questioning whether the market had factored in the ETF approval or not. Contrary to a widely circulated narrative linking the Bitcoin price drop to Grayscale’s GBTC selling Bitcoin, Julio Moreno, head of research at CryptoQuant, dispels this notion. He reveals that despite GBTC selling around 60,000 Bitcoins, other Bitcoin ETFs collectively purchased approximately 72,000 Bitcoins, effectively offsetting GBTC’s sales.
Moreno attributes the recent volatility in Bitcoin’s price to profit-taking by holders, specifically short-term traders and whales who capitalized on gains from last year’s surge. He suggests that the SEC approval may have triggered a “sell-the-news” event, impacting the cryptocurrency’s price.
On-chain analytics firm Glassnode delves into the data, indicating that the Bitcoin price drop may have been influenced by both derivatives leverage and spot profit-taking. Metrics from both on-chain and derivatives realms suggest that a significant portion of Bitcoin investors treated the ETF approval as a “sell-the-news” event. Glassnode’s analysis reveals an uptick in open interest (OI) in both futures and options markets since mid-October, with OI remaining at multi-year highs, signaling an increase in leverage and its growing dominance in the markets.
As of the latest update, Bitcoin has shown a 0.58% increase in the last 24 hours, reaching $41,543, according to CoinMarketCap data. The cryptocurrency market continues to navigate through the aftermath of the SEC’s groundbreaking ETF approvals, with investors closely monitoring the evolving dynamics.
