Headwinds for bitcoin [BTC] continues to linger and could contribute to prices falling lower in the coming days, despite the apparent early successes of several U.S. listed spot exchange-traded funds (ETFs).
Bitcoin prices fell as low as 15% after the much-awaited ETF listing last week, with outflows from Grayscale’s Bitcoin Trust product said to be contributing to the downward pressure.
ETF volume data provided by BlackRock (BLK), Fidelity and Bitwise cumulatively crossed the $500 million mark earlier this week – indicating demand from regulated funds and professional traders. Coinbase (COIN), the custodian for several ETF providers, saw record-high OTC desk transfer volumes.
But further downside risks remain, on-chain analysis firm CryptoQuant said in a Thursday note shared with CoinDesk.
“Several on-chain metrics and indicators still suggest the price correction may not be over or at least that a new rally is still not on the cards,” CryptoQuant analysts said. “Short-term traders and large bitcoin holders are still doing significant selling in a context of “risk-off” attitude.
“Additionally, unrealized profit margins have not fallen enough for sellers to be exhausted,” it added. The firm was among the few to take a contrarian view of the bitcoin ETF approvals, one that many traders expected would lead to price gains after they went live.
Crypto traders shared the sentiment, pointing out that any strength in an upside was dampened as spot sales seemed to occur.
“Although bitcoin’s intraday range exceeded 3.5%, reaching the highs of the recent trading range triggered a methodical sell-off early on Wednesday,” said Alex Kuptsikevich, FxPro senior market analyst, in an email to CoinDesk.
“Intraday dynamics instead point to methodical selling near local highs, while bounces are occurring sharply and with less volume. This is a cautionary observation but not at all a verdict on the cryptocurrency bull market,” Kuptsikevich added.