Crypto News– The impact of the Bitcoin spot ETF on the collective consciousness of the industry cannot be overstated. In the years leading up to its approval, the crypto sector awaited its arrival with anticipation and speculation. Now that the ETF is a reality, there’s still significant attention on its short and long-term effects. According to Matrixport, Bitcoin’s price is anticipated to experience a decline in the first quarter.
Matrixport Forecasts Bitcoin’s Decline to 36,739 Dollars Amidst ETF Profit-Taking
In recent weeks, Bitcoin has dipped to the $39,000 support level, prompting questions about the ETF’s impact. Some optimistic experts had hoped for a bull run-like effect following the ETF’s approval.
It’s notable that TradeFi’s interest in the ETF hasn’t quite reached the levels some had anticipated, which could be a contributing factor. Nonetheless, the latest report from Matrixport suggests that the crypto industry should prepare for further decline. Matrixport predicts that Bitcoin’s price will reach the support level of $36,739 in the first quarter, but reassures that it will bounce back from this point.
This prediction is based on the strength of Bitcoin’s liquidity and its solid core support base. While there may be initial challenges regarding the ETFs’ integration into the market, these obstacles are expected to be overcome in due course.
Examining the Current State of ETFs
Amidst the ongoing discourse surrounding the impact of ETFs on Bitcoin’s price, it’s crucial to delve into the performance of these ETFs themselves. Notably, a pattern has emerged wherein ETFs capitalize on the initial spike in Bitcoin’s price and subsequently report outflows. For instance, Grayscale’s Bitcoin spot ETF GBTC recorded a net outflow of $394 million on January 25, alongside a single-day trading volume of $502 million and cumulative net outflows of $4.79 billion. However, over a three-day span, these outflows slowed, hinting at a potential reversal of this trend in the future.
Nevertheless, these outflows likely contributed to the decline in Bitcoin’s price, and the actions taken by ETFs will undoubtedly be reflected in the market price going forward. There are numerous reports of ETFs acquiring tens of thousands of Bitcoin tokens, effectively emerging as a new class of whales in the market. This development was anticipated once the spot applications were approved, and now, the industry must contend with whatever impact they have on the token’s price, whether positive or negative.