Bitcoin ETF Favourable Information Landing, 1.23 Plunge Brings the Market Back to Technical Bear Market?
Under the gloomy market sentiment, Bitcoin ushered in a "big fall": after falling below the integer mark of $40,000 in the early morning of January 23, it fell again from 15:00 today, once falling below the integer mark of 39,000 USDT, down more than 4.4% in 24 hours. ETH also fell below the integer mark of 2400 USDT and 2300 USDT in 24 hours, reaching a minimum of 2212 USDT. At the same time, the copycat market is even more wailing, and the previously outstanding SOL and BNB have generally fallen by more than 20% or more from their recent highs.
Overall, after the dust settled on the SpotBitcoin ETF on January 11, the crypto market did not usher in a crazy rally, but started a volatile downward trend: in the past two weeks, it has fallen by more than 20% from the stage high of 48,988 USDT and entered a technical Bear Market.
What is the reason for the crash?
1. Continued BTC selling pressure on grayscale ETFs
The first is the sustained BTC selling pressure caused by Grayscale Investments' GBTC Trust after it successfully converted to a spot ETF: at present, GBTC has another outflow of more than $640 million in a single day, the largest one-day outflow to date, and the cumulative outflow after the ETF transfer has reached $3.45 billion, while except for GBTC, the remaining 10 ETFs are in a net inflow state.
In particular, as of January 23, the total Trading Volume of all SpotBitcoin ETFs in the first seven trading days was about $19 billion, and GBTC accounted for more than half, which also means that the incremental funds brought by ETFs are still under selling pressure in the stage of continuous outflows of Hedging GBTC.
In a way, this will be a card game in the coming period: GBTC still holds more than 500,000 BTC (about $20 billion), and the institutions and funds to enter the market will definitely wait for the right time to collect chips to eat away at the share. This also means that the selling pressure of GBTC may still overwhelm the subjective inflow of funds for some time to come.
2. Mt. Gox's Sword of Damocles
In addition, dForce founder Yang Mindao also tweeted today that Mt. Gox creditors have received an email confirming account ownership of the exchange Address entered earlier by the user as the receiving Address for BTC/BCH. And Yang Mindao said that "200,000 Bitcoin will be unlocked in the next two months to pay creditors, and the PayPal Fiat Currency channel has already begun to pay."
Although the repayment deadline of the previous Mt. Gox trustee was postponed to October 31, 2024, the creditors who have provided information will begin to repay the loan as early as the end of 2023, so if calculated according to this calculation, 200,000 BTC in the next 2 months, repaid in the form of Fiat currency, all sold will be $8 billion selling pressure.
3. Other factors
Notably, the 2023 Mining Report predicts that the average cost of production per Bitcoin after the Halving will be $37,856, and unless the Bitcoin price remains above $40,000, only some will continue to be profitable.
The current Bitcoin market price has basically touched this key cost line, and with the April Block RewardHalving approaching, Miner will undoubtedly further increase capital expenditure in order to increase their advantage in the next round of the arms race, which may also prompt Miner to continue to reduce their holdings and start a new phase-out cycle.
History doesn't simply repeat itself, but it always rhymes with the same rhyme.
Of course, there is an element of "selling facts", but it also reflects that the impact of traditional financial players on the crypto market may not be monotonous Favourable Information or Unfavourable Information - people are always prone to overestimate the short-term impact and underestimate the long-term impact. Looking back now, these milestones have all promoted the industry to continue to move towards a more mainstream public vision from the big cycle, but they have indeed encountered a lot of market pullbacks in the short term.
Stay optimistic and don't go up, history spirals rise twists and turns. "It's a logical and almost inevitable evolution, and a nascent security with a highly uncertain value and price is becoming a mainstream asset with millions of participants."
(Source: Frank)
