- January 20, 2024
- Posted by: [email protected]
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Following the approval of Spot Bitcoin exchange-traded funds (ETFs) by the United States Securities and Exchange Commission (SEC), the cryptocurrency landscape has been navigating a nuanced “sell-the-news” scenario, revealing the intricate dance between market dynamics and ongoing investor sentiments. South Korean data firm CryptoQuant has been at the forefront of analyzing the aftermath, shedding light on the multifaceted reactions within the cryptocurrency community.
As the Spot Bitcoin ETFs commenced trading, their debut was met with record-breaking volumes for an ETF launch. Notably, the Coinbase exchange witnessed unprecedented over-the-counter (OTC) desk transfer volumes, signifying heightened activity in response to the regulatory nod. Interestingly, despite the sell-off triggered by the “sell-the-news” phenomenon, most Bitcoin ETFs are currently trading at a premium to the underlying spot Bitcoin prices, a phenomenon elucidated by CryptoQuant.
The foresight of a “sell-the-news” event predicted by CryptoQuant materialized as cryptocurrency traders seized the opportunity to sell, resulting in a notable price decline of up to 15% since January 11, with Bitcoin’s value sliding from $48,700 to as low as $41,500.
Presently, Bitcoin is finding support within the range of $41,000 to $43,000, although a potential downtrend is not entirely dismissed. Despite this, the broader cryptocurrency market continues to maintain positive momentum, bolstered by various factors that contribute to its resilience.
CryptoQuant’s analysis points to on-chain metrics and indicators that suggest the ongoing price correction may not have reached its conclusion, or at the very least, a new rally is not immediately on the horizon. Short-term traders and substantial Bitcoin holders continue their selling activities, contributing to an overall “risk-off” sentiment in the market.
In a somewhat paradoxical turn of events, the spot Bitcoin ETFs, despite the initial sell-off, are witnessing substantial inflows, boasting an impressive cumulative trading volume of nearly $10 billion within a mere three days. Bloomberg analyst James Seyffart emphasizes Grayscale’s GBTC as the standout performer among these ETFs, recording an extraordinary three-day trading volume of $5.174 billion. BlackRock’s IBIT and FBTC by Fidelity also exhibited significant engagement, securing $1.997 billion and $1.479 billion in trading volume, respectively. Collectively, these three ETFs amassed an impressive $9.771 billion in trading volume, underscoring the persistent and robust investor interest in the cryptocurrency market.
In the global economic arena, as the World Economic Forum (WEF) unfolds in Davos, crypto attendees are expressing a renewed sense of optimism fueled by the SEC’s approval of ETFs. Sebastien Borget, COO and co-founder of The Sandbox, encapsulates this sentiment, stating that the recent ETF approval symbolizes a new era and the broader recognition of the potential of cryptocurrency and blockchain as technologies and digital assets that can now be embraced and supported more widely by various types of investors. This optimism hints at a paradigm shift, positioning cryptocurrency as a mainstream investment vehicle with growing acceptance among traditional financial elites.
