Investors had envisioned a different start to the year for cryptocurrencies, with Bitcoin struggling to maintain the $40,000 level after approaching $50,000. The leading cryptocurrency has yet to secure support in this region, causing concern among market participants.
Bitcoin’s price failed to reclaim the critical $40,400 support zone, leading to a potential further decline. Outflows from the Grayscale Bitcoin Trust (GBTC) reached approximately 13,000 BTC, indicating a bearish market sentiment that is unlikely to shift to positive soon.
While inflows into other ETFs could balance the situation, over $20 billion in Grayscale assets might create a significant gap this year. High annual management fees and investor dissatisfaction with GBTC are exacerbating the outflow from the trust.
Crypto trader Daan Crypto Trades believes the panic will eventually subside after a few weeks, suggesting a potential return to balance in the market.
Amidst this negative outlook, it may be wise to watch for a deeper market bottom. However, a resurgence is expected once the panic subsides. Binance, the world’s largest crypto exchange by volume, has been highlighted for its order book liquidity, which could prevent a deeper price drop, suggesting that significant liquidity blocks near the price could indicate a potential reversal or consolidation.