As an experienced financial analyst, I believe that the recent price drop of Bitcoin below $61,000 following the launch of the first Bitcoin ETFs in Hong Kong does not necessarily signal imminent danger for the cryptocurrency falling below $60,000. While it is true that the weekly and monthly charts show a decline in Bitcoin’s price, this is not an uncommon occurrence in the volatile world of cryptocurrencies.
The price of Bitcoin (BTC) dipped under $61,000 following the debut of the first Bitcoin ETFs on Hong Kong’s stock exchange. Could Bitcoin drop beneath $60,000 in the upcoming days?
BTC price falls below $61K as Hong Kong ETF launches
As a crypto investor, I’ve noticed that the value of Bitcoin dipped to a weekly low of $60,543 on April 30, following the introduction of the first batch of spot Bitcoin ETFs in Hong Kong the previous day. This decline represents a drop of over 7.3% for the week and a more significant loss of around 13% when measured against the monthly chart, as indicated by CoinMarketCap.
During the initial trading day, Hong Kong-based Bitcoin ETFs managed to generate a mere $12.4 million in trading volume. In contrast, their US counterparts saw significantly larger trading volumes, with a value of approximately $4.6 billion on their first day.
Despite its relatively small market size, Hong Kong recorded an impressive trading volume of approximately $2.7 billion, which is equal to around $1.6 billion in the US market, as per senior Bloomberg ETF analyst Eric Balchunas’ assessment.
Balchunas wrote in an April 30 X post:
“You have to understand [that Hong Kong] is 1/168th the size of the U.S… That said, Hong Kong ETFs launched at a good time as the U.S. is slowing, so their $141m+ in inflows going to more than offset slightly negative U.S. flows.”
Around 14% of the everyday trading amounting to $12.4 million in Hong Kong was seized by Ether spot ETFs. The remaining 86% were directed towards Bitcoin-based ETFs.
Bitcoin ETF news “gets absorbed”
According to Mehdi Lebbar, the co-founder of Exponential.fi, a risk assessment platform for institutions, the decrease in Bitcoin’s price following the launch of Hong Kong ETFs can be explained as a “selling off after good news” occurrence.
“Market participants often anticipate these events, leading to a price surge prior to the actual news, and subsequently take profits once the news is public. This pattern suggests a tactical response from short-term traders to capitalize on the hype, followed by a correction as the news gets absorbed.”
As a financial analyst, I’ve been closely monitoring the Bitcoin ETF market in the US, and this week has seen a decrease in negative net flows compared to the previous one. Specifically, the ten Bitcoin ETFs reported over $257 million in outflows, a reduction from the over $396 million in outflows experienced during the prior week based on Dune Analytics data.
In the year 2024, U.S.-listed Bitcoin Exchange-Traded Funds (ETFs) played a substantial role in driving up Bitcoin’s price. As of February 15, approximately three-quarters of the fresh investments into Bitcoin were channeled through these ETFs, as the cryptocurrency reached an all-time high above $50,000, based on data from CryptoQuant.
More downside ahead for Bitcoin?
According to Ben Caselin, the CMO of VALR exchange, Bitcoin had been trending downward for several weeks and could potentially dip below the $60,000 threshold based on his analysis. (Or) Ben Caselin of VALR exchange predicted that Bitcoin’s previous weekly downtrend might cause it to drop beneath the $60,000 price point.
“Bitcoin could certainly descend below $60,000 and could certainly see resistance for a few weeks, but ultimately the effects of the Halving will kick in and so most long-term holders of Bitcoin would take this period of time as an opportunity.”
As an analyst at Exponential.fi, I believe that Bitcoin’s potential dip below the $60,000 mark shouldn’t be viewed as a cause for alarm by long-term holders. Historically, such corrections have occurred following post-halving rallies, and they often present attractive buying opportunities.
“If Bitcoin’s price goes below this mark, it may further slide towards the $52,000 support level. This support could present a significant buying opportunity, especially since long-term investors often benefit from acquiring during such dips.”
As a crypto investor, I can tell you that over $306 million in total leveraged long positions would be liquidated if the price of Bitcoin dipped below $60,000 on all exchanges, based on data from Coinglass.
As CryptoMoon reported the key levels to watch will be around $60,000 and $51,000.
According to Matt Bell, the CEO of Turbofish, open-source software firm, traders need to be vigilant about the crucial $60,000 mark this week. (Or) This week, traders should remain attentive to the significant support level at $60,000, as suggested by Matt Bell, CEO of Turbofish.
“Key levels this week include psychological supports like $60,000 and resistances like $65,000 while monitoring sentiment, institutional activity, and macro factors adds context.”
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2024-04-30 19:30