Bitcoin continues its decline since the approval of spot Bitcoin ETFs in the United States. After the ETFs were approved on January 11, the Bitcoin price rose to $49,000, but then fell below $39,000. In general, cryptocurrencies also lost blood. Here are the details…
Santiment evaluated the Bitcoin decline
Evaluating this decline, Santiment pointed out that Bitcoin fell to these price levels for the first time since December 2023 and described this decline as a bloodbath. Santiment also stated that there was a decrease in Bitcoin and Ethereum (ETH) conversations compared to the ETF approval week, and said that FUD was starting to rise and argued that this could be a bullish signal. Given that historically there has been a positive correlation between the level of FUD and the likelihood of a price bounce, Santiment analysts point out that as FUD establishes, the likelihood of a price bounce increases.
FUD list for cryptocurrencies from Layergg
On the other hand, Layergg, a famous cryptocurrency analysis company, has compiled a list of potential FUDs that can be expected in the coming period. Here is the FUD list compiled by the analysis company:
- Grayscale is expected to sell between 10,000 and 25,000 BTC every day. According to the analysis company, outflows are not slowing down; It’s actually increasing. Total outflow so far is a staggering $3.45 billion. Notably, FTX has sold nearly $1 billion of Grayscale’s GBTC since the Bitcoin ETF approval.
- The BTC distribution of the sunken cryptocurrency exchange Mt.Gox is expected to occur within the next two months, with 200 thousand BTC unlocked. In December 2023, some Mt.Gox creditors received compensation in yen through PayPal. It is worth noting that, according to analysts, most Mt.Gox holders’ Bitcoin purchase price is below $1000, which may affect their selling decisions.
- The US government currently holds approximately 100 thousand BTC related to Silk Road. They announced that they planned to sell 50 thousand Bitcoins seized from Silk Road in four installments, but there has been no update since July. However, it is likely to continue once the ETF is implemented.
- Grayscale holds $7-8 billion of the Ethereum futures ETF ETHE. ETHE, similar to GBC, until recently was trading at a discount of up to 50% to its normal price. This brings to mind the possibility of an Ethereum version of the “ETF – Sell the News” phenomenon. Interestingly, FTX’s ETHE holdings are a quarter of GBTC’s.
Increase in FUD is a bullish signal
According to Santiment analysts, the rise of FUD can be interpreted as a bullish signal. This is because FUD often causes overselling in the market, which leads to prices falling even further. However, when FUD reaches its peak, it indicates that the market is oversold and prices may begin to recover. Therefore, there are signs that Bitcoin may begin to recover in the coming period. However, for this to happen FUD must reach its peak and the market must be oversold.
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