Bitcoin Dips Below $40,000 but Stops Above the 100 SMA
Bitcoin was riding the wave in the run-up to the ETF approval by the SEC on a ‘buy-the-rumor move’, which kept the sentiment positive for the crypto market during 2023. That sent the BTC surging to $49,050 following the launch of 11 BTC ETFs, but this turned into a ‘sell the fact’ trade and the price has since declined, falling below $40,000 yesterday.
Sellers Testing the 100 SMA in Bitcoin
BITCOIN has continued to be bearish since then, breaking below the 50 SMA (yellow) which was holding as support for about a week on the daily chart. That moving average stood at around $41,500 and after the break, BTC/USD headed lower, falling to the $40,500-600 zone, which has been acting as support since December 10.
On Friday we saw a bounce off that level which sent Bitcoin to the 50 SMA again, but this moving average turned into resistance now, rejecting the price. Yesterday we saw another attack to the downside, sending the price below the December low of $40,180 which corresponds to the $40,000 psychological threshold. Bitcoin’s price plummeted to a new monthly low, breaking below $40,000 for the first time since the first week of December. Staying below such levels provides sellers with more technical control, bringing back to attention the next significant level at $37,000. However, we saw a quick reversal back above the 40,000 zone.
BTC ETF Flows Remain Disappointing
So far, flows into Bitcoin ETFs have been disappointing, with approximately 94,000 BTC coins and $3.9 billion in assets under management (AUM) since launching for trade earlier this month. The massive Grayscale Bitcoin Trust (GBTC) is reported to have carried out a large amount of BTC sales, with the GBTC having approximately 567,000 bitcoins by Friday last week, down from around 620,000 early in January, which could be one of the main drivers during this retreat in BTC after the Jan. 11 debut of spot BTC ETFs.
However, around 20,000 Bitcoins have entered the market by the bankruptcy estate for the crypto exchange FTX which sold all the 22 million shares it owned of GBTC for almost $1 billion. So, some of the BTC selling is coming from this as well.
On the other hand, we heard yesterday that BlackRock has purchased a stunning 11,500 BTC coins during this decline after the introduction of the Bitcoin ETFs, which is significant given that only 900 BTCs are issued every day. This could lead to a serious supply crunch if BlackRock keeps up the purchasing.
Bitcoin BTC Live Chart
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