The recent debut of spot exchange-traded funds (ETFs) in the U.S. has put pressure on Bitcoin (BTC), leading to a 12% drop in its price to $42,700 from the high of $48,975. This downward trend has been attributed to traders capitalizing on long positions in anticipation of the ETFs’ launch. Specifically, Binance, OKX, and Upbit have seen concentrated selling pressure, as evidenced by the cumulative volume delta (CVD), which tracks net buying and selling volumes.
Analysis from Kaiko reveals that Binance experienced a significant capital outflow of nearly 5,000 BTC following the ETFs’ launch, with Upbit, Itbit, and OKX also seeing substantial net capital outflows. This indicates a “sell-the-news” reaction to the ETFs’ trading debut. Furthermore, institutional exchanges like Itbit consistently showed selling pressure, while Coinbase and Bitstamp saw positive CVD, suggesting a net capital inflow despite the price weakness.
While some analysts anticipate further price declines to $40,000 and below, the initial performance of the ETFs has fallen short of Bloomberg analysts’ projection of $4 billion in inflows on the first day. This suggests the potential for a deeper price drop in the near term.
In light of these developments, it is crucial for traders and investors to closely monitor the market dynamics and the impact of ETFs on Bitcoin’s price trajectory. As the crypto industry continues to evolve, understanding the relationship between traditional financial instruments like ETFs and the crypto market is essential for making informed investment decisions.
