Bitcoin (BTC) price has been fluctuating between $38,000 and $42,000 for a while. The pattern followed by the price indicates significant consistency within this trading range. This trading range was formed after BTC’s price dropped by over 20% last week. With this decline, the price of the largest cryptocurrency fell below the psychologically important support level of $40,000, signaling further downward movement. Interestingly, despite the sharp drop in price, Bitcoin’s trading volume significantly increased. In the last 24 hours, the trading volume surged by over 65%, reaching an impressive figure of $31 billion. This increase in volume demonstrates high and active interest in Bitcoin trading among investors.
Trading Volume in Spot Bitcoin ETFs Rises Despite Price Drop
While Bitcoin’s price movements continue to attract investor interest, spot Bitcoin exchange-traded funds (ETFs) are generating notable trading volumes. According to recent data, the cumulative trading volume of ETFs is exceeding $2 billion on a daily basis. Grayscale’s converted spot ETF, Grayscale Bitcoin Trust (GBTC), contributes more than half of the daily trading volume, making a significant impact.
As an indicator of high investor interest in Bitcoin through ETFs, the cumulative trading volume reached nearly $19 billion in the first seven trading sessions. As a notable development, the world’s largest asset management company, BlackRock, managed iShares Bitcoin Trust (IBIT) purchased an additional 4,808 BTC from Coinbase Prime about 12 hours ago. This latest acquisition, worth approximately $194.4 million, increased the total value of Bitcoin assets in the fund to around $1.33 billion (33,431 BTC).
Despite the increase in ETF activity, Bitcoin’s price has not kept up with this enthusiasm and continues to trade below the $40,000 level. The contrast between high ETF trading volumes and the drop in the price of the largest cryptocurrency presents a complex view for market participants.
Spot Bitcoin ETFs Show Resilience Amidst Market Volatility
Bitcoin’s price experienced a significant increase from $24,000 to $49,000 from the last quarter of 2023 to the beginning of this year. This uptrend was largely due to the pricing in of the approval of multiple spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC). Following the SEC’s approval, Bitcoin’s price unexpectedly fell.
Currently, the next major support level for Bitcoin is around $38,000. If BTC falls below this threshold, it could be pulled towards $35,000 and possibly retest the $30,000 level. Conversely, a recovery with upward momentum could push Bitcoin to the $45,000 region, and even beyond the $48,000 threshold once again.
However, many technical indicators largely point to a neutral outlook, but there is a noticeable increase in selling pressure. The Relative Strength Index (RSI) is neutral at the 34 level, not offering a clear directional trend. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator is below the zero line, indicating a bearish outlook. The Chaikin Money Flow index remains negative at 0.04, highlighting the short-term bearish trend in the Bitcoin market.
