Bitcoin, the leading cryptocurrency by market capitalization, continued its descent from a two-year high, as traders assessed the aftermath of the much-anticipated first day of trading for exchange-traded funds (ETFs) tracking the cryptocurrency.
During Friday’s trading session, BTC experienced a significant drop of up to 10%, reaching as low as $41,444. The preceding day saw the initiation of trading for almost a dozen ETFs, briefly propelling Bitcoin beyond $49,000, marking its highest point since December 2021.
This downward trend persisted into early Saturday trading, with BTC registering a 7.47% loss in the previous 24 hours, settling at $42,715.
SkyBridge Capital founder, Anthony Scaramucci, suggested that the decline in Bitcoin’s value could be partially attributed to the sale of shares in the Grayscale Bitcoin Trust. Notably, even the share prices of all Bitcoin ETFs experienced a decline on Friday. GBTC, operational since 2013, recorded a remarkable first-day turnover of $2.3 billion.
Scaramucci further pointed out that the FTX bankruptcy estate is actively “unloading” assets, contributing to substantial selling volume for Bitcoin amidst heightened market activity surrounding the ETF announcement.
Crypto analyst Ali highlighted that Bitcoin faced rejection at $48,000 from the upper boundary of a parallel channel on its price chart. Should the decline persist, there’s a possibility of reaching the channel’s lower boundary at $34,000 before rebounding to the upper boundary at $57,000.
Gareth Soloway, a crypto trader, identified a critical test for Bitcoin at $42,000–$43,000. Maintaining this crucial level, according to Soloway, could pave the way for a resurgence; however, breaking it might open the door to $38,000.
Despite the ongoing price drop, proponents of cryptocurrencies remain optimistic. Some believe Bitcoin could reach $100,000 or even $250,000 this year, citing the recent approval of the first-ever U.S. spot Bitcoin exchange-traded fund by the Securities and Exchange Commission (SEC) as a significant driver for future growth.
