Bitcoin recently dipped below $40,000 but quickly bounced back to $40,070, boosting investor confidence.
Matrixport Research predicts Bitcoin may dip to $36,739, citing TradFi’s lukewarm interest in Bitcoin ETFs and profit-taking by Grayscale investors.

Recently, Bitcoin has weathered a challenging period, sinking below the $40,000 mark for the first time since December. On January 23, 2024, the cryptocurrency’s value plummeted to approximately $38,680, sparking investor concerns. However, Bitcoin has shown resilience, swiftly bouncing back and crossing the $40,000 threshold again, instilling newfound confidence within the crypto community.

Despite the recent resurgence, Matrixport Research, a prominent analytical firm, has issued a forecast suggesting that Bitcoin may dip further, potentially reaching a support level of $36,739. This prediction comes with the caveat that Bitcoin’s fate hinges on the overall macroeconomic environment and liquidity conditions.

A January 26 Matrixport research report predicted that Bitcoin will fall to the support level of $36,739, and the price will rebound from this support level, as the overall liquidity and macro environment remain supportive. It noted that TradeFi’s interest in a Bitcoin spot ETF…

— Wu Blockchain (@WuBlockchain) January 26, 2024

 

Recent developments have seen Bitcoin’s price plummet to the $39,000 support level, raising questions about the ETF’s influence. Many optimists had hoped for a bull run following the ETF’s approval. Matrixport’s latest report predicts a temporary decline, with Bitcoin’s price touching the support level of $36,739 during Q1. 

Matrixport’s latest insights were unveiled through a post by renowned crypto journalist Colin Wu, who highlighted several factors contributing to the predicted dip. One key factor is the subdued interest from Traditional Finance (TradFi) in recently approved Bitcoin spot exchange-traded funds (ETFs). Furthermore, Matrixport believes that the impending dip might result from consistent profit-taking by the Grayscale Bitcoin Trust (GBTC) investors.

Grayscale Bitcoin Trust’s Role in the Market

Following approval to launch spot-based Bitcoin ETFs in the United States, Grayscale, one of the leading asset managers, has been actively moving substantial quantities of Bitcoin to Coinbase Prime, the custodian platform of San Francisco-based exchange Coinbase. Recently, Grayscale deposited an additional 9,434 BTC into the custodian platform, bringing the total deposit since the ETF approval to 103,134 BTC, valued at $4.23 billion.

Grayscale deposited 9,434 $BTC($376.5M) to #CoinbasePrime again 8 mins ago.#Grayscale has deposited 103,134 $BTC($4.23B) to #CoinbasePrime since the #ETF was passed.

And #Grayscale currently holds 510,682 $BTC($20.43B).https://t.co/6fjPOhvFox pic.twitter.com/FHaXDCHUqY

— Lookonchain (@lookonchain) January 25, 2024

The movement of Grayscale’s BTC holdings to Coinbase Prime has triggered mixed reactions within the crypto community. While some crypto enthusiasts view it as Grayscale divesting its BTC assets, the company has stated that these transfers are intended for safekeeping.

Matrixport’s Previous Predictions and the Role of Spot Bitcoin ETFs

Matrixport’s recent forecast regarding Bitcoin’s price comes on the heels of its earlier prediction that Bitcoin would surge to $50,000. According to their analysis, the approval of Bitcoin Spot ETFs was expected to be a major driving force behind this price target. However, despite the SEC’s approval of multiple Bitcoin ETFs on January 10, Bitcoin has yet to reach the $50,000 mark, with Matrixport forecasting a possible drop to $36,739 before any rebound.

Adding to the cryptocurrency market dynamics, a group of newly launched spot Bitcoin ETFs witnessed collective outflows for the first time since their inception. Notably, funds like BlackRock’s IBIT and Fidelity’s FBTC struggled to keep pace with the outflows experienced by Grayscale’s GBTC. Data compiled by Bloomberg Intelligence analyst James Seyffart revealed a net outflow of $158 million across the 10 spot Bitcoin ETFs, including GBTC, on a particular day. This shift from positive inflows may be temporary as daily flows fluctuate. 

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Filed under: Bitcoin - @ January 27, 2024 8:04 pm