Gray Scaling Out
Bitcoin falls below $40k after ETFs go live
Cheat Sheet -
Current support and resistance ranges plus our bias on top cryptos, oil, and stocks.
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What We Are Watching
We further breakdown our case for these cryptos here : What We Are Watching
Crypto News
Nine new spot bitcoin ETFs amass over 100,000 BTC in seven days of trading (The Block)
Masa raises $5.4 million in seed funding to build a personal data network on Avalanche (The Block)
US lawmakers press Meta over crypto and blockchain plans (CoinTelegraph)
Mt. Gox confirms creditors’ Bitcoin addresses for repayment: Report (CoinTelegraph)
FTX Sold About $1B of Grayscale's Bitcoin ETF, Explaining Much of Outflow: Sources (CoinDesk)
Bitcoin Under $39K As ETF Debut Continues To Be a ‘Sell-the-News’ Event (CoinDesk)
SEC’s X account fell victim to SIM swap attack (Blockworks)
Is risk-off back? Bitcoin, ether dip ahead of next Fed meeting (Blockworks)
Dogecoin Pumps Amid Speculation Over Twitter Payments (Decrypt)
The most expensive bitcoin fund might be MSTR, not GBTC (Protos)
How privacy coins Firo and Zcash dodged Binance delisting with novel transparency plan (DLNews)
BTC Outlook
The ETF was launched and the news was sold as expected. Many are blaming Grayscale’s outflows for the declining Bitcoin price. This could be possible as coins that were locked into the Grayscale Trust are now redeemable after the trust has converted to an ETF. More likely is the fact that many attempted to price in the ETF launches and front ran the news. The Bitcoin market now lacks a demand driver in the short term and so it’s expected that there would be more sell pressure than buy pressure following the ETF launch.
Focusing back on our beloved moving averages, the 200 day MA is now crossing upwards above the 50 day MA (golden cross). This is the first time this has happened since summer 2019. However, for 250+ days after this event in 2019 Bitcoin went through a correction phase falling from ~$13k to ~$3k. Note that ~$6k was holding until the Covid liquidity crisis drove the price from ~$6k to ~$3k in one week of trading. The price then rose to $69k by late 2021 and the 200 day MA did not cross back below the 50 day MA until September 2022.
Some catalyst is needed now to drive the price higher in the mid term. The market will likely focus on Fed rate cuts that are expected this year and inflation data. Of course, if some company adopts Bitcoin into it’s Treasury or some small country pushes forward legislation supporting Bitcoin that could possibly create a short term rise in price. Until then, the slow sell off towards the 200 day MA is likely to continue.
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Possible Course of Action
Short here expecting price to return to 200 day MA
DCA into spot long over Q1 in anticipation of Halving (2024 summer)
The Bulls’ Defense:
Price still trading above 200 day MA
Golden Cross
The Bears’ Prosecution:
ETF is priced in (sell the news)
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