The Bitcoin market is undergoing a noticeable shift with increasing selling pressure, largely influenced by Grayscale, the asset manager behind the Grayscale Bitcoin Trust (GBTC). Since the commencement of spot Bitcoin ETF trading on January 12, Grayscale has been actively selling, evident from substantial BTC transfers to Coinbase.
As per Arkham Intelligence data, in addition to the previously reported 69,994 BTC transfers amounting to $2.9 billion, Grayscale moved an additional 8,593,075 BTC (approximately $335.19 million) to the exchange on Tuesday, indicating a potential continuation of selling activities. This trend has had a significant impact on Bitcoin’s price, witnessing a 20% decline over the past week and a half.
On Tuesday, Bitcoin dipped to $38,500, testing a crucial support level. Despite the bearish pressure, the $38,500 support has held resilient, with Bitcoin bouncing back to $39,300 at the time of writing.
The uncertainty lies in the duration of Grayscale’s selling spree. If negative market sentiment persists, there is a possibility of Bitcoin revisiting the $30,000 mark, just above the key $29,000 level that marked the start of the bull run leading to Bitcoin’s 22-month high of $49,000 on January 11th.
Market observers should closely monitor the $38,500 threshold, as its breach under Grayscale’s selling pressure could lead to profit-taking. The next resistance level at $37,750 becomes crucial in this scenario, potentially paving the way for a decline to major support at $35,600 and subsequently preventing a dip to the next support level at $33,000.
In the event of a continued downtrend, key support levels to watch for potential bullish momentum are $29,000 to $30,000. A breakdown below these levels could mark the end of the current bull market structure, giving bears an advantage at least until the anticipated halving event in April.
Historically, halving events have been pivotal catalysts for Bitcoin prices, and their impact remains evident. As the Bitcoin market grapples with intensified selling pressure and Grayscale’s ongoing selling spree, market participants are exercising caution regarding the potential for a significant price plunge. The next days and weeks will be crucial in determining whether Bitcoin can recover its bullish momentum or succumb to further downward pressure.
