- January 20, 2024
- Posted by: [email protected]
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In today’s volatile markets, the prediction of Bitcoin’s price has taken center stage, with BTC currently trading at $42,700, reflecting a modest 0.75% decline on Thursday. This dip occurs against the backdrop of heightened market activity, highlighted by a staggering $1 billion influx into Bitcoin Exchange-Traded Funds (ETFs) in just three days. Simultaneously, external factors such as the severe cold spell in Texas have triggered a significant 34% drop in Bitcoin’s hash rate, showcasing the cryptocurrency’s susceptibility to real-world events.
Adding to the intricacy of the situation is VanEck’s move to delist its Bitcoin Strategy ETF, a decision attributed to evolving investor preferences and the fund’s performance. These developments collectively create a multifaceted outlook for Bitcoin’s future valuation and the underlying dynamics of its market.
Recently introduced spot Bitcoin ETFs witnessed net inflows of around 21,000 bitcoins in their initial three days, translating to approximately $894.6 million at the prevailing Bitcoin price of $42,600. Key contributors include Fidelity’s Wise Origin Bitcoin Fund (FBTC) with 12,112 bitcoins and BlackRock’s iShares Bitcoin Trust (IBIT) with 16,362 bitcoins.
Following approval by the U.S. Securities and Exchange Commission (SEC), Grayscale’s Bitcoin Trust (GBTC) experienced significant outflows, shedding approximately 25,000 bitcoins during its transition from a closed-end fund to an ETF. Despite a subsequent 10% drop in Bitcoin’s price since the ETFs’ launch, they generated a substantial $10 billion in trading volume within the first three days, sparking ongoing debates about Bitcoin’s future success.
The hash rate of Bitcoin faced a substantial 34% decline amid freezing temperatures affecting Texas’s energy grid. Texas, hosting around 29% of the U.S. Bitcoin hash rate, became a focal point for mining companies relocating from China following regulatory crackdowns. Major mining operations, like Marathon Digital, temporarily halted activities during the extreme cold to preserve the electrical grid’s stability, underscoring Bitcoin’s vulnerability to external environmental factors.
VanEck’s decision to delist its Bitcoin Strategy ETF, just under two years since its launch, is attributed to factors including investor interest and fund performance. This move follows the SEC’s recent approval for VanEck to list shares of its spot Bitcoin ETF. The closure of the Bitcoin Strategy ETF, trading under the ticker XBTF on the Cboe BZX Exchange, is scheduled for February 6th, with shareholders having until January 30th to divest their holdings.
VanEck hinted at the SEC’s approval for spot Bitcoin investment vehicles playing a role in phasing out the futures-based ETF, reflecting the evolving trends within the ETF marketplace and the dynamic nature of financial investment instruments.
As of January 18, Bitcoin (BTCUSD) is experiencing a minor decline, trading at $42,688, down by 0.11%. Technical analysis reveals critical pivot points, resistance levels at $44,384, $45,260, and $47,060, and support levels at $42,374, $41,469, and $40,492. The Relative Strength Index (RSI) at 44 suggests a neutral market sentiment, and the 50-Day Exponential Moving Average (EMA) at $43,408 indicates potential resistance.
Chart patterns depict Bitcoin consolidating within a tight trading range of $43,500 to $41,500, signaling a period of indecision among traders. Conclusively, the prevailing trend for BTC/USD appears bearish below the $43,400 mark, but a breach of this level could potentially shift the sentiment, with short-term resistance levels likely influencing the current bearish outlook.
