Bitcoin price shows strength at $43K despite Coinbase, GBTC selling
Bitcoin (BTC) pushed above $43,000 on Jan. 15 as the market attempted to rebound from the post-spot BTC ETF approval sell-off that occurred on Jan. 10. At the time of writing, the BTC price was hovering around $43,100, up 0.89% on the day.
This recovery comes after attempts to push BTC above $50,000 last week were stopped at $49,000, suggesting the buyers' inability to sustain higher levels.
Bitcoin price stalls below $44,000
Data from Cointelegraph Markets Pro and TradingView tracked a trip above $43,000 before BTC price volatility returned, sending the market down 1.05% in two hours.
The move occurred as traders attempted to shake off the effects of the sell-off that followed the approval of spot Bitcoin ETFs in the United States last week.
In an X (formerly Twitter) post, popular trader Skew noted that BTC’s spot markets broadly stalled around $43,000 with “increasing ask liquidity” above the current price.
$BTC Binance SpotPrice stalling here with increasing ask liquidity above price ($44K)
key LTF highs & 4H 200EMA ~ $43,168 pic.twitter.com/105qhKinMV
— Skew Δ (@52kskew) January 16, 2024
The ongoing recovery, Skew added, had been driven by GBTC selling, with some traders possibly buying the dip.
$BTC Looks like everyone is trying to ride the GBTC driven price action, what could possibly go wrong lol pic.twitter.com/iw6s4Bjlhx
— Skew Δ (@52kskew) January 16, 2024
When asked about Bitcoin’s recent price action, Cointelegraph head of markets Ray Salmond said,
“From what I can see, traders see the ETF selling and have decided to open up shorts since the approval. Also, since bvol (Bitcoin options volatility) dropped in the day before the approval and options traders positioned in puts. GBTC selling at Coinbase seems to paint a bearish short-term picture for some, leading traders to go short, but as Skew points out, they eventually may get squeezed and the uptrend toward mid $50s continues.”
Related: Will Bitcoin keep dropping because of the ETFs?
However, considering how BTC/USD has been stuck between $41,500 and $43,00 over the last few days, analyst Mac says Bitcoin’s next leg down could continue to $38,000.
Mac said,
“Retrace to $40,000 and possibly $38,000 is very possible here. Either $45,000-> $40,000 or sideways and $40,000 from here.”
BTC dominance tops out
To support Bitcoin’s reducing strength, Michaël van de Poppe, founder and CEO of trading firm MNTrading, saw Bitcoin continuing to lose ground against other cryptocurrencies as a part of the combined cryptocurrency market cap.
He posted the following chart in a Jan. 12 post on X, saying,
“#Bitcoin dominance peaking before the halving and potentially marking a cycle top. Altcoins are likely to outperform in the coming period.”
History repeating itself.#Bitcoin dominance peaking before the halving and potentially marking a cycle top.
Altcoins are likely to outperform coming period. pic.twitter.com/ox36x2M5NG
— Michaël van de Poppe (@CryptoMichNL) January 15, 2024
Bitcoin's market dominance index has dropped from its local top of 54.56% to 49.82% in a week.
Gains by Ether (ETH) are the major reason why Bitcoin's dominance declined, comprising 8.5%, with other altcoins posting similar gains.
This suggests that traders likely rotated capital out of Bitcoin to the altcoin market following the ETF approvals, seeing better risk-reward elsewhere, particularly with an Ethereum ETF now on the table.
If this happens, altcoins, led by Ethereum, are likely to start rallying as the market enters the much-awaited altcoin season.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
