Bitcoin Price Decline: Unraveling the Factors

Why Bitcoin's Value is on a Downward Spiral

Bitcoin, once soaring at $49,000 during the ETF launch, has plummeted to $39,000, marking a 9% weekly and a substantial 20% decline from its peak. All top 50 coins report negative returns in the last seven days.

Structural Sell-off Unveiled

Analysts Uncover the Market Dynamics

Cryptocurrency research company K33 Research reveals a structural sell-off, attributing the decline to a blend of CME futures outflows, spot sales, and structural factors.

CME Traders Trim Exposure

Market Adjustments Post-ETF Launch

Post-ETF launch, CME traders strategically reduce exposure, anticipating a continued trend until active market participants withdraw another 20,000 BTC. GBTC outflows persist, but are expected to dwindle over time. European and Canadian ETPs show moderate flows, signaling normalization post-US ETF launches.

Stabilization Expected in February

Analyzing the Road Ahead

Analysts project a diminishing impact of structural effects, foreseeing Bitcoin price stabilization as February approaches. CME exposure reduction is expected to accelerate, especially nearing January futures expiration.

GBTC Outflows: A Mixed Bag

Decoding the GBTC Exodus

One-third of GBTC outflows link to FTX liquidations, while a significant portion results from traders closing GBTC discount arbitrage trades. Analysts anticipate a rapid decrease in this unique negative flow.

Transition to Cheaper ETFs

Market Shifts from GBTC to ETFs

K33 Research predicts the ongoing trend of funds flowing from expensive GBTC to more affordable ETFs. This shift is expected to have a net-neutral market effect, with a softer price impact compared to the previous week.