What is the reason for Bitcoin’s decline after ETF?

The long-awaited launch of a spot Bitcoin (BTC) exchange-traded fund (ETF), although they momentarily boosted the currency’s price, triggered an opposite reaction in the market.

Analysis firm Kaiko indicates that The “buy the rumor and sell the news” strategy was one of the catalysts for the fall of Bitcoin, This concept refers to acquiring an asset before an expected event occurs and selling it for a profit after that event occurs, even if it is something positive.

This caused the price of the digital currency, which had soared to $49,000 a day after the 11 Bitcoin ETF was approved, to later fall to $41,500, according to the Kaiko report. Since that moment, the price of BTC has been sideways and currently stands at $43,000, as seen on the Trading View chart.

Price of BTC in the last seven days. Source: TradingView.

According to the firm’s research, when ETFs began trading on stock exchanges, Accumulated volume delta increased sharply (CVD) on various exchanges.

CVD is a technical analysis tool that measures the cumulative difference between the buying and selling volumes of Bitcoin over time. It is calculated as the sum of the absolute values ​​of the difference between buying quantity and selling quantity in each time period.

on the Binance platform Almost 3,000 BTC were purchased About an hour after market open in the United States, CVD turned negative, as happened on the OKEx exchange, as seen in the graph.

Cumulative Volume Delta (CVD) turned negative after the Bitcoin ETF exit. Source: TradingView.

On the other hand, a report from Bitfinex exchange said Short-term investors transferred 2.2 billion in BTC to exchanges Last Friday, January 11, an all-time high for this type of transaction was recorded and the price of BTC fell.

Definitely, The beneficiaries were short-term investorsThose who had accumulated positions in anticipation of the ETF event and decided to sell immediately upon hearing the news, thus ensuring “substantial profits,” Bitfinex details.

Ethereum was the winner this time with a Bitcoin ETF

For its part, as reported by CriptoNoticias, Ether (ETH), the native cryptocurrency of Ethereum, Bitcoin was the winner for the launch of ETF cash.

At the time of release on the stock exchange, the price of ETH reached $2,700, currently it is at $2,568. Its price increased by 13% over the past seven days, as shown in the following TradingView graph.

ETH price last week. Source: TradingView.

This increase occurs because the United States Securities Exchange Commission (SEC) considers both Bitcoin and Ether as commodities (and not securities). This is why the authorization of a spot Bitcoin ETF is ultimately a potential signal Ether ETF will also be approved,

This possibility has created an atmosphere of anticipation Contributed to ETH’s bullish momentum as Bitcoin investors booked profits, The arrival of ETH-based ETFs could potentially open up new investment opportunities and attract even more capital into the cryptocurrency ecosystem.

(TagstoTranslate)Bitcoin (BTC) (T)United States (T)ETF (T)Latest (T)Prices and Trading

Source link

About Admin

Check Also

14 richest men in the world according to forbes

The club of billionaires worth more than $100 billion is seeing its ranks swell, testament ... Read more

Leave a Reply

Your email address will not be published. Required fields are marked *