Bitcoin dips below 42K, longs liquidated: GBTC funds outflow, experts still hope for long-term supply shortage

Over the weekend, the price fluctuations of Bitcoin (BTC) once again became the focus of the market. After the speculation surrounding ETFs, the price of BTC repeatedly fell below the $42,000 mark, indicating weak trading volume and unstable market sentiment.

Liquidation in Large Volume within 24 Hours, BTC Liquidates $26 Million

According to Coinglass data, in the past 24 hours, the overall contract market liquidated $26.49 million worth of BTC, with long liquidations accounting for the majority at $18.8 million. Most other currencies also experienced long liquidations, with only a few tokens such as XAI and TIA bucking the trend with a rise in value.

The "Sell the News" Effect

Initially, the approval and launch of a Bitcoin spot ETF drove the price of Bitcoin to nearly $49,000. However, after the excitement, there was a significant drop in price, partly due to the market's reaction to the "Sell the News" event.

KOL Aylo predicted in early January that the real "Sell the News" moment would be when the ETF is actually launched, rather than when it is approved. It seems that prediction has come true. Aylo: Bitcoin's "Sell the News" won't be at the "ETF approval" moment, Q1 is sure to see a big drop.

ETF Performing Well, GBTC Still Seeing Outflows

Compared to SPY and QQQ

Compared to last year's most traded SPY and QQQ in terms of trading frequency and trading volume, the Bitcoin spot ETF has performed quite well in both nominal trading volume and actual trading amount.

The Bitcoin spot ETF's trading volume exceeded $10 billion in its first two days of listing. Is this a success or a bubble?

GBTC Seeing Fund Outflows

On the first day, Grayscale's GBTC saw outflows of $95.07 million, while other funds saw net inflows. The champion on the first day was Bitwise BITB with $238 million, followed by Fidelity's FBTC with $227 million, and then BlackRock's IBIT with $112 million.

The market is cautious about the outflow of funds from Grayscale's GBTC ETF. Since 2022, holders of the fund have been in a loss-making position and may be looking to sell to break even.

Experts Expecting a Potential Supply Shortage

Experts believe that if these institutions continue to purchase Bitcoin at the same level, it could lead to a supply shortage in a few months, thereby driving Bitcoin prices to new highs.

Traditional finance experts: After the approval of the Bitcoin spot ETF, it is expected to be widely adopted by 401k retirement plans.