Bitcoin Price Won’t Move Until Complete Liquidation of Grayscale Bitcoin Trust

Bitcoin (BTC), the largest cryptocurrency globally, experiences continued selling, resulting in a 2.72% drop in its price to $40,766. The recent decline is attributed to significant Bitcoin sales by Grayscale following the GBTC share sale. Notably, the funds from these sales are swiftly flowing into recently introduced Bitcoin ETFs, accumulating an impressive $27 billion within just one week of their launch

Grayscale Bitcoin Trust Liquidation

In a recent analysis, crypto analyst Chris J Terry offers insights into the current state of Bitcoin (BTC) prices, forecasting a potential continuation of a flat or downward trend. According to Terry, this trend is expected to persist until the completion of the liquidation of Grayscale Bitcoin Trust (GBTC), with an estimated $25 billion worth of selling activity anticipated over the upcoming weeks.

Terry points to what he deems a significant strategic error in crypto history, attributing it to Grayscale’s decision to maintain ETF fees at 1.5%. He suggests that this move by Grayscale could have lasting consequences on the market and potentially hinder broader adoption. The analyst’s observations highlight the interconnected nature of investment vehicles and their impact on the overall cryptocurrency landscape.

However, Grayscale CEO Michael Sonnenshein has objected to this view that the high GBTC fees are leading to strong liquidations.

Looks like #BTC price will continue flat/down until #GBTC is liquidated, $25B of selling over the next few weeks. #Grayscale decision to keep #ETF fess at 1.5% will go down as the biggest strategic error in #crypto history. GREEDY IDIOTS. @saylor @starkness @aantonop @rogerkver… pic.twitter.com/fjRDfPQgA2

— Chris J Terry (@chrisjterry) January 21, 2024

Galaxy Digital CEO Mike Novogratz expresses a differing opinion. While acknowledging the likelihood of some selling activity in GBTC, Novogratz believes that a significant portion of investors will transition to other exchange-traded funds (ETFs), with a notable endorsement for $BTCO.

Novogratz emphasizes the importance of not losing sight of the bigger picture amid short-term market dynamics. He highlights that the recent development will make it more convenient for older investors (boomers) to enter the cryptocurrency market. Additionally, he points out the opportunity for increased leverage with 4×5 times exposure to Bitcoin through $BTCO.

Despite the current market indigestion, Novogratz remains optimistic about Bitcoin’s future, predicting that the challenges will subside, and Bitcoin’s value will see an upward trajectory in the next six months.

BTC Price Expectations

In a recent analysis by On-chain College, attention is drawn to the significance of the Bitcoin 111-day moving average, a primary short-term indicator in Pi Cycle analysis. The analysis involves overlaying this moving average with the short-term holder cost basis for BTC.

As Bitcoin experiences a period of range-bound trading, On-chain College notes a gradual narrowing of the gap between these two indicators. According to the analysis, if the cryptocurrency’s price were to decline further, the level to closely monitor is in the range of $37.7K to $38.1K. This level is identified as crucial, offering insights into potential support or resistance dynamics based on the convergence of these key indicators.

The Bitcoin 111 day moving average is the main short-term indicator used in the Pi Cycle analysis.

I overlapped it with the BTC short-term holder cost basis.

As BTC ranges, the gap between these two tightens.

$37.7K-$38.1K would be a level to watch should price fall further pic.twitter.com/Mq5dTnGGwz

— On-Chain College (@OnChainCollege) January 21, 2024