- Daily outflows fell from $640 million to $255 million.
- Bitcoin rebounded significantly this weekend.
Bitcoins [BTC] The disappointing run since the adoption of spot ETFs has spoiled the party for many market participants who expected an immediate price spike.
The king coin exchanged hands at $42,176, down 13% from its peak on ETF approval day, according to CoinMarketCap.
The grayscale threat looms
As has been widely reported, the main bearish catalyst was outflows from the Grayscale Bitcoin Trust (GBTC), which has transitioned to a spot ETF.
According to AMBCrypto’s analysis of SoSoValue data, Bitcoins worth more than $5 billion have left the trust since the transition.
GBTC shareholders, who previously had no access to their holdings, began to benefit once redemptions were allowed after the conversion to an ETF.
Source: SoSo value
Whereas Grayscale still had over 500,000 Bitcoins in custody at the time of writing, there were concerns about prolonged bearish conditions.
Has the pain started to subside?
However, in recent days the pace of outflow has slowed significantly.
As analyzed by AMBCrypto, daily outflows gradually fell from $640 million early last week to $255 million this weekend.
Head of Research at Coinshares, James Butterfill, also alluded to this gradual reduction in posts on social platform X (formerly Twitter).
The grayscale outflows aren’t pretty, but it looks like they’re starting to diminish. pic.twitter.com/IZXHZWbiKG
— James Butterfill (@jbutterfill) January 28, 2024
Furthermore, all recently launched Bitcoin spot ETFs recorded net inflows on January 26, after four consecutive days of net outflows.
The fact that Bitcoin rose above $42,000 on the same day provided the first indications that selling pressure may be easing.
Source: SoSo value
Whales, analysts hopeful
Meanwhile, influential whale investors ignored Bitcoin in droves.
According to AMBCrypto’s analysis of Glassnode data, the number of entities holding at least 1K coins has risen to the highest level since May 2022.
Read Bitcoin’s [BTC] Price forecast 2024-25
The trajectory has been on an upward trend since the spot ETFs were approved.
Source: Glassnode
Market observers also became optimistic about Bitcoin’s next moves. Shivam Thakral, CEO of Indian cryptocurrency exchange BuyUcoin, said:
“Blackrock Bitcoin ETFs became the first to reach $2 billion in assets under management and created a wave of positive sentiment around the world’s largest digital asset. We can expect Bitcoin to reach the $45,000 level if the current momentum continues and there are no surprising news headlines.”