- The bitcoin price dropped below $40,000, signalling the bears regaining strength after remaining passive for a while
- Meanwhile, multiple reasons indicate that a massive FUD trap may be laid out in the coming days, which may flip market sentiments
Ever since the Bitcoin price lost the crucial resistance at $45,000, many speculations have been laid in favour of the price plunging below $40,000. Thus, the price made a steep jump towards the south and is discovering new lows close to $39,000. Amid the rising strength among the bears, the possibility of the traders falling into a bearish FUD trap has become more prominent. Therefore, the next few days may be extremely crucial for the BTC price and the entire crypto space.
Here are the top 5 reasons why Bitcoin price could be in danger!
Billions of Dollars Worth of Bitcoin Have Been Pulled Out of Grayscale
According to some resources, FTX has been constantly selling its GBTC holdings, which had risen to around $900 million on the first day of Grayscale’s Bitcoin ETF. Investors have sold more than $3.45 billion worth of GBTC since the launch of ETFs, and a large chuck was held by FTX of around 1 billion shares. The outflows do not appear to have slowed down, which may create a fresh bearish case.
Mt.Gox BTC Distribution Expected in the Next Two Months
The much-awaited Mt.Gox redistribution plan is expected to be fulfilled in the next couple of months. As per the notice let out by the exchange, the details of the owners of the account held on the Mt.Gox exchange have been forwarded to a custodian exchange, which has been verified and confirmed. With GBTC repricing, the unlock of over 200K BTC may have a huge impact on the entire crypto space. Moreover, the halving is approaching, and hence interesting supply dynamics may be in play in the coming months.
US Government Plans to Sell 41,000 BTC Connected to Silk Road
The US government holds about 100,000 BTC seized from the Silk Road. Recently, they announced plans to sell 50,000 BTC in four instalments. But they have not been since July, which may be likely with the spot Bitcoin ETF in play.
After BTC, Spot ETF Could Make Huge Rounds
Grayscale Ethereum Trust (ETHE) holds nearly 7 to 8 billion ETHE which was trading at up to a 50% discount to its NAV. This suggests the possibility of an Ethereum version of the ETF selling the news event very soon.
Technical Implications
Bitcoin has been experiencing massive upward pressure ever since the token faced a rejection close to $49,000. With the fresh bearish start, the price is expected to maintain a healthy descending trend that could compel the price to reach the lower support zone close to $36,000. However, the bulls appear to be stationed at $38,000, which may trigger a rebound. However, the market conditions for the Bitcoin (BTC) price do not appear to be in a bullish direction, and hence a steep descending trend could be on the horizon.
