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Bitcoin, the largest cryptocurrency by market capitalization, continued its plunge from a two-year high as traders evaluated the results of the much-hyped first day of trading for exchange-traded funds that track the cryptocurrency.
In Friday’s trade, BTC plunged as much as 10% to as low as $41,444. After almost a dozen ETFs began trading on Thursday, Bitcoin momentarily surpassed $49,000 for the first time since December 2021.
The losses were sustained in early Saturday trading, with BTC down 7.47% in the previous 24 hours to $42,715.
According to SkyBridge Capital founder Anthony Scaramucci, sales of Grayscale Bitcoin Trust shares might have partly contributed to Bitcoin’s drop since the commencement of trading of Bitcoin ETFs.
On Friday, the share prices of all Bitcoin ETFs fell as well. GBTC, which has been in operation since 2013, had $2.3 billion in volume on Thursday, the most first-day turnover for an ETF.
Scaramucci added that the FTX bankruptcy estate is also “unloading” assets amid increasing market activity surrounding the ETF announcement, resulting in very significant selling volume for Bitcoin.
What analysts think
According to crypto analyst Ali, Bitcoin was rejected at $48,000 from the upper boundary of a parallel channel shown on its price chart. If BTC continues to fall, it might reach the channel’s lower boundary at $34,000 before rebounding to the upper boundary at $57,000.
Gareth Soloway, a crypto trader, believes that the first big test for Bitcoin is currently at $42,000–$43,000. If this crucial level holds, BTC can begin to rise again. On the other hand, if it breaks, $38,000 may be in play.
Despite the current price drop, cryptocurrency bulls believe Bitcoin might reach $100,000 or even $250,000 this year, drawing from the approval of the first-ever U.S. spot Bitcoin exchange-traded fund by the Securities and Exchange Commission (SEC).