Bitcoin (BTC) fell below $42,000 for the second time over the weekend after failing to break above $43,100 amid subdued trading volumes after the ETF hype at the end of last week.
As of press time, BTC was trading at $41,870 on most of the large exchanges. The price is still above the key support level of $40,250; however, sell pressure continues to mount before the Asian markets open for trading.
The flagship crypto experienced $23.68 million in liquidations over the past 24 hours, roughly 85% of which were longs — equating to $20.11 million, according to CoinGlass data.
The liquidations largely affected traders on prominent exchanges, with Binance and OKX bearing the brunt, witnessing liquidations of $7.51 million and $5.26 million, respectively.
Sell the news
The approval and launch of spot Bitcoin ETFs initially led to a surge in Bitcoin’s price, reaching around $49,000. However, following the excitement, there has been a notable downturn in the price, partly due to market reactions typical of “sell the news” events.
This kind of market behavior often occurs when there is a build-up of anticipation for an event (like the launch of ETFs), followed by a quick sell-off after the actual event.
From a technical analysis perspective, Bitcoin was showing signs of buyer exhaustion and increased selling pressure. Analysts observing indicators like the Exponential Moving Average (EMA) noted that Bitcoin was trading at key resistance levels, suggesting a potential price correction.
These technical signals can often lead to a self-fulfilling prophecy as traders and investors react to them.
ETF issuers buying the dip
Meanwhile, the ETF issuers have reportedly bought 23,000 BTC amid the downturn, with BlackRock accounting for 11,500 Bitcoin. It is unclear whether the interest in these products will continue to gain traction or if the weekend lull is a precursor to the coming days.
Experts believe that if these institutions continue scooping up Bitcoin at similar levels, it will likely lead to a supply crunch within a few months and could push the price to new highs.
However, the market has been wary of outflows from Grayscale’s GBTC ETF, whose holders have been underwater since 2022 and are likely looking for an opportunity to sell as they are made whole.
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