The headwinds for Bitcoin (BTC) continue to persist and could help drive prices lower in the coming days, despite the apparent early successes of several U.S.-listed spot exchange-traded funds (ETFs).
Following last week's highly anticipated ETF listing, Bitcoin prices fell as much as 15%, with outflows from Grayscale's Bitcoin Trust product said to have contributed to downward pressure.
ETF volume data provided by BlackRock (BLK), Fidelity and Bitwise collectively surpassed $500 million earlier this week – an indication of demand from regulated funds and professional traders. Coinbase (COIN), the custodian of several ETF providers, saw record-breaking OTC desk transfer volumes.
However, downside risks remain, on-chain analytics firm CryptoQuant said in a note shared with CoinDesk on Thursday.
“Several on-chain metrics and indicators still suggest that the price correction may not be over yet, or at least that a new rally is not yet in sight,” CryptoQuant analysts said. “Short-term traders and large Bitcoin holders are still making significant sales in the context of a “risk aversion” attitude.
“Furthermore, unrealized profit margins have not fallen to the point where sellers are exhausted,” it added. The company was among the few to take a contrarian view on the Bitcoin ETF approvals, which many traders expected would lead to price increases following the launch.
Crypto traders echoed this sentiment, pointing out that any upward momentum was dampened as spot selling appeared to occur.
“Although Bitcoin’s intraday range exceeded 3.5%, reaching the highs of the recent trading range triggered a systematic sell-off early Wednesday,” said Alex Kuptsikevich, senior market analyst at FxPro, in an email to CoinDesk.
“Intraday dynamics instead suggest methodical selling near local highs, while pullbacks come sharply and on lower volume. This is a cautionary observation, but by no means a judgment on the cryptocurrency bull market,” Kuptsikevich added.