Bitcoin Faces Steep Decline Amid ETF Sell-Off

Bitcoin supporters find solace in the maintenance of a bullish structure above $29,900.

A substantial sell-off has ensued in response to the introduction of Bitcoin (BTC) exchange-traded funds (ETFs), resulting in a steep decline in the price.

Following their approval and subsequent entry into circulation on Thursday, the exchange-traded funds (ETFs) instigated a “sell the news” phenomenon, which precipitated a steep decline in the value of Bitcoin. Within hours of the approval, the price of Bitcoin dropped from $46,500 to $43,200.

Impacts of ETF Approval on Bitcoin: Immediate Price Decline

In the previous twenty-four hours, Bitcoin, the largest cryptocurrency market capitalization, declined 7%. It has made only 4% in gains over the last thirty days, erasing a significant portion of the progress made during that time.

Moreover, since the approval has prompted an increase in selling pressure, there are signs that the price of Bitcoin might encounter additional downward pressure.

On Wednesday, J.A. Maartunn, an analyst at CryptoQuant, identified substantial sell orders on the two-week chart of Bitcoin. Significantly, three concentrations of sell orders, each consisting of stacks of 755, 1,031, and 794 BTC, were positioned between $46,100 and $48,000.

Such patterns, according to the CryptoQuant analyst, are commonly linked to market peaks unless the orders mentioned above are subsequently revoked or carried out.

This influx of sell orders may partially account for the current lackluster reaction to the ETF approvals, as it would appear that selling pressure has been mounting. Nevertheless, the situation has become even more dire.

Maartunn reports that on Friday, further sell orders were identified, suggesting that the vendor has not completed their work as of yet.

Above the BTC price, two significant sell orders have been executed: one for 894 BTC at $44,000 and another for 1,071 BTC at $45,100.These occurrences indicate that market participants are capitalizing on the ETF news to divest their Bitcoin holdings, which has resulted in heightened selling pressure and a subsequent price decline.

Uncertainty surrounds the market’s stabilization after this phase of escalated selling pressure. It was anticipated that implementing ETFs would generate increased institutional interest and potentially cause Bitcoin’s price to rise.

Nevertheless, it is critical to specify that the consequences of these exchange-traded funds (ETFs) are anticipated to materialize gradually, spanning several months rather than days, weeks, or even months.

The complete assessment of the impacts and repercussions of ETF integration on the Bitcoin market is expected to require several years. Amidst the persistent selling pressure, several support lines have the potential to impede the decline and deliver favorable developments for the Bitcoin price and proponents of BTC.

Even though BTC has already surpassed its previous support level of $44,000, an additional critical threshold of $42,700 may impede any further decline. Bitcoin may reclaim the $43,000 threshold and halt the decrease in momentum if this level is maintained.

Upon a violation of the $42,700 support, supplementary support lines become operational. These levels ($42,300, $41,700, and $41,200) are the final obstacles before a possible examination of the support level at $40,000. The $40,000 threshold is a critical level, as it signifies the last support before a potential decline toward $38,000.

At the same time, BTC supporters should contemplate a positive aspect. If the cryptocurrency maintains its bullish structure, it will not retrace below $29,900.

This level signified the initiation of the present bullish uptrend, and its maintenance would guarantee the preservation of the favorable market structure.