The recent drop in the price of Bitcoin is reminiscent of its behavior following the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States in January. One trader suggests that this could lead to an upswing in the next week or so.
On April 30, spot Bitcoin (BTC) ETFs were introduced in Hong Kong, attracting approximately $217 million in net inflows. However, the price of Bitcoin has since decreased by nearly 7%, according to data from CoinMarketCap.
Quinten Francois, co-founder of WhereAt Social and a crypto trader, notes that this pattern is similar to the launch of spot Bitcoin ETFs in the U.S. In that case, the price of Bitcoin fell by 14% within 12 days of the launch before rising by 7% over the following seven days. If Bitcoin continues to follow this trend, Francois suggests that we may see an upswing in the next week.
Meanwhile, pseudonymous crypto trader StockLizard adds, “There is no straight line to the top. Price correction was more than needed.”
However, there are some notable differences between the two launches. While the Hong Kong Bitcoin ETFs have attracted $217 million in net inflows, the U.S. ETFs experienced $794 million in outflows during the same period. Additionally, the Hong Kong-based ETFs had a trading volume of only $12.4 million on their first day, significantly lower than the $4.6 billion first-day trading volume of the U.S. spot Bitcoin ETFs.
The launch of the Hong Kong ETFs also coincided with the Bitcoin halving, which often leads to a period of sideways price movement. Furthermore, tensions in the Middle East and the U.S. Federal Reserve’s decision to maintain high interest rates have contributed to the current market conditions.
Some traders are concerned that the inflows from Hong Kong may not be enough to offset the recent outflows from the U.S., potentially hindering a similar breakout pattern. The crypto trading team TOBTC states, “Hong Kong Bitcoin ETFs are not enough to absorb US ETF selling pressure.”
On the other hand, some traders believe that the recent price decline is a healthy correction for Bitcoin’s price. Crypto trader Titan of Crypto explains, “The longer the Bitcoin consolidation takes, the higher its price will meet the trendline.” Crypto commentator CryptoCon agrees, stating, “Bitcoin’s most recent correction was much needed for its future price.”
Founder of AirBtc Handre van Heerden echoes this sentiment, saying, “The thing Bitcoin critics don’t understand is that we simply don’t care if the price drops.”
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research before making any investment or trading decisions.