Bitcoin is undergoing a challenging period, with an unexpected downturn following the SEC’s approval of a Bitcoin ETF, leading to a rare four-day loss streak. As of writing, Bitcoin’s price has dropped to $42,588, with a market cap reduced to $834 billion.
After the approval of 11 ETF applications, including those from major asset managers like BlackRock Inc. and Fidelity Investments, Bitcoin briefly soared to a two-year high of $49,000. However, the subsequent fall exemplified the “buy the rumor, sell the news” reaction, with analyst Tony Sycamore suggesting a potential retreat to the $38,000-$40,000 range.
According to Bloomberg Intelligence senior analyst Eric Balchunas, new U.S. spot funds saw an influx of $819 million in the first two days, with BlackRock’s iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund attracting significant investments of $500 million and $422 million, respectively.
However, not all news was positive. Grayscale Bitcoin Trust, with $26 billion in assets, caused investor panic with a $579 million outflow after its ETF conversion. Analyst Ali Martinez highlighted a possible price channel for Bitcoin, with resistance at $48,000 and support at $34,000, which could lead to a rise towards $57,000.
Martinez also noted a significant change in the Bitcoin Miners Position Index (MPI), signaling increased miner selling, which could continue to impact Bitcoin’s price and potentially lead to further declines. The influence of miners on Bitcoin’s price is substantial, and investors should monitor this closely.