Bitcoin’s value dropped below the $61,000 threshold following the launch of the first spot Bitcoin exchange-traded funds (ETFs) in Hong Kong. This has raised concerns about whether Bitcoin will dip below $60,000 in the coming days.
On April 30, Bitcoin reached a weekly low of $60,543, just one day after the introduction of the initial batch of spot Bitcoin ETFs in Hong Kong. According to CoinMarketCap, the world’s first cryptocurrency has experienced a 7.3% decline on a weekly basis and a 13% decline on a monthly basis.
The Hong Kong-based ETFs only accumulated $12.4 million in trading volume on their first day, which is significantly lower than the first-day trading volume of US spot Bitcoin ETFs, which amounted to $4.6 billion. However, considering the size of the Hong Kong market, this is still a substantial figure. It is equivalent to $1.6 billion worth of trading volume in the United States, as stated by Eric Balchunas, a senior Bloomberg ETF analyst.
Approximately 14% of the $12.4 million daily trading volume was attributed to spot Ether ETFs in Hong Kong, while 86% flowed into Bitcoin-based ETFs.
The drop in Bitcoin’s price following the launch of the Hong Kong ETFs can be seen as a typical “sell-the-news” event, according to Mehdi Lebbar, the co-founder of Exponential.fi. Similarly, in the United States, weekly Bitcoin ETF net flows remain negative. According to Dune data, the ten Bitcoin ETFs experienced net outflows of over $257 million this week, down from over $396 million in the previous week.
US-based ETFs played a significant role in Bitcoin’s price increase in 2024. By February 15, Bitcoin ETFs accounted for approximately 75% of new investments in the world’s largest cryptocurrency as it surpassed the $50,000 mark, according to CryptoQuant research.
Ben Caselin, the CMO of VALR exchange, suggests that Bitcoin’s downward trend in recent weeks may cause it to fall below the $60,000 mark. However, this could present an opportunity for long-term holders to buy, similar to corrections seen in previous post-halving rallies.
If Bitcoin’s price were to fall below $60,000, over $306 million worth of leveraged long positions would be liquidated across all exchanges, according to Coinglass.
Traders are advised to closely monitor the key support levels of $60,000 and $51,000. Matt Bell, the CEO of Turbofish, emphasizes the importance of the $60,000 support level this week.
It is important to note that this article does not provide investment advice or recommendations. Investors should conduct their own research before making any decisions.