The Bitcoin price has been moving steadily at its current but failed to meet general expectations. Following the approval of the spot Bitcoin Exchange Traded Funds (ETFs), market participants were expecting potential scenarios.
In these potential scenarios, Bitcoin pushed through critical resistance at $48,000 and continued making new highs, or the cryptocurrency retraced to $30,000. As usual, the market has avoided pleasing the crowd as BTC trades at $42,000.
Bitcoin Price Ready To Dip?
The spot BTC ETFs have been influencing the market; the capital flows from these financial products have been used to suppress the cryptocurrency. A pseudonym analyst has been keeping track of crypto exchange Coinbase to connect the flows with the Bitcoin price action.
Since its initial launch on January 11, the BTC flows into Coinbase have increased. This trading venue is key due to its role as Custodian in most spot Bitcoin ETFs filed with the US SEC.
Thus, asset managers who want to buy or sell BTC go to Coinbase. The exchange sees fluctuations in its Bitcoin price in the spot market compared to other exchanges.
As the trading volume on Coinbase has increased since the spot Bitcoin ETFs launch, the platform records some of its highest activity. In the meantime, the Bitcoin price trends sideways. The pseudonym analyst stated:
(…) supply is coming from somewhere, obviously gbtc and maybe some others, like cme futures, anyways, whats most important is coinbase is still trading discount compared to other spot venues and thats very weak, unless you’re managing billions $, you can probably wait to fomo once coinbase is dragging market up instead of dripping sells.
Another crypto analyst echoed these words; the chart below shows that the Coinbase Premium Gap signals strong selling pressure. If history repeats, the metric hints at a fierce crash for Bitcoin.
In that sense, the analyst recommends “patience” while Bitcoin moves sideways and the Coinbase Premium Gap signals a potential dip into support.
Bitcoin ETFs Breaking Record
A report from Reuters indicates that the spot Bitcoin ETFs attracted almost $2 billion in their first few days of trading. BlackRock and Fidelity led these capital inflows and will maintain them depending on their fee structure, CEO of CF Benchmarks Sui Chung claims, while adding:
Those that charge the lower management fees will unsurprisingly make themselves more appealing compared to their peers. Brand recognition is another core aspect.
However, several experts have questioned these flows, which disputed the numbers. Three days after the ETFs launched, NewsBTC reported $800 million in new inflows based on a report by Eric Balchunas, ETF expert for Bloomberg Intelligence.
Cover image from Unsplash, chart from Tradingview