Despite recent market conditions that have seen Bitcoin’s value drop below the critical $39,000 level, large BTC holders, often referred to as “whales”, are demonstrating confidence in the flagship cryptocurrency.
Crypto analyst Ali said: shine light on This development was reported via a post on X, which shows that these major investors are taking advantage of the recent price correction to strengthen their Bitcoin portfolios.
Ali’s analysis revealed that approximately 67 new companies have joined the elite group of Bitcoin holders holding 1,000 BTC or more, increasing their holdings by 4.50% in just two weeks.
— Ali (@ali_charts) January 30, 2024
This move by the whales runs counter to general market sentiment. This suggests a bullish outlook for these major players despite the price volatility and uncertainty gripping the broader crypto industry.
Bitcoin resilience and recovery: factors involved
In contrast to the recent price slump, Bitcoin has shown resilience and is on a recovery trajectory. The cryptocurrency has increased in value by more than 10% over the past week, with a notable increase of 3.2% in the past 24 hours alone, to a trading price of approximately $43,412.
This upward trajectory is also reflected in the cryptocurrency’s trading volume, which has increased from less than $15 billion to more than $24 billion in a single day, demonstrating renewed investor interest and market confidence. It is shown.
The recovery in Bitcoin prices can be attributed to multiple factors, but the main one is the reduction in the impact of the decline in grayscale.
Bloomberg analyst James Seifert recently highlighted a milestone event in which BlackRock’s spot Bitcoin ETF, IBIT, nearly matched Grayscale’s GBTC in terms of trading volume. This was a key moment as it marked the closest Bitcoin Spot ETFs have come to challenging GBTC, which has long held the “liquidity crown” in the crypto spot ETF space.
It is clear that this development will have a positive impact on Bitcoin price. Since the IBIT volume is primarily comprised of inflows, it could potentially offset the volume, which is dominated by outflows from GBTC.
Decreasing sales pressure and market optimism
In particular, Grayscale’s conversion of GBTC into a Spot Bitcoin ETF was a major factor in Bitcoin falling below $39,000 last week, triggering a wave of selling from GBTC investors.
However, recent trends indicate that GBTC investors’ rush to book profits has cooled. BitMEX Research says in a post about X: pointed It was revealed yesterday that GBTC recorded its lowest daily outflow since its inception, reaching $192 million.
Bitcoin ETF Flow – Day 12
GBTC flow data output
$192 million outflow
— BitMEX Research (@BitMEXResearch) January 29, 2024
This trend of decreasing outflows indicates a reduction in selling pressure in the Bitcoin market, contributing to the cryptocurrency’s price recovery.
Adding to the positive sentiment, Glassnode co-founder Jan Happel and Yann Allemann, also known as Negentropic of pointed out that it had occurred.
This situation suggests that Bitcoin is filling a liquidity void above the $42,000 mark, which could lead to volatility and market changes. Negentropic notes that approximately $659 million in liquidations has already occurred.
If Bitcoin maintains its upward trajectory, it could trigger a further liquidation of $1 billion worth of short positions, leading to a “short squeeze.” This scenario, where short sellers are forced to exit their positions due to rapid price increases, could encourage further growth in Bitcoin’s value.
Featured image from Unsplash, chart from TradingView
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