Bitcoin price eyes recovery as Grayscale’s GBTC outflow decelerates



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  • Grayscale’s Bitcoin Spot ETF slowed its bleed, GBTC outflow has reduced this week. 
  • Bitcoin halving, a key driver for BTC gains, is nearly 81 days away. 
  • Bitcoin holder base has held steady, BTC supply across multiple age bands is just below its all-time highs.
  • BTC price inched closer to $43,000 on Wednesday. 

Bitcoin price recovered from its drop to $38,555. The asset made a swift recovery this week, shy of the $43,000 level on Wednesday. Grayscale’s GBTC bleed slowed down this week, likely catalyzing the recovery in Bitcoin. 

The asset’s holder base has held steady through the recent correction in Bitcoin price. While a non-trivial volume of older supply has moved in recent weeks, the percentage of BTC supply held across three and five year bands is just below its all-time high. 

Bitcoin’s leading catalyst, the halving event, is 81 days away according to CoinGecko’s countdown timer. The event is expected to catalyze BTC price gains, as seen in previous instances. 

Also read: Bitcoin price could rally as buying power increases with rise in exchange stablecoin reserves

Daily Digest Market Movers: Bitcoin halving draws close, BTC holders await price gains

  • Bitcoin price has consolidated in the weeks leading up to the halving event, in previous instances. 
  • Halving is considered a major catalyst for BTC price gains and the market trend surrounding this event typically unfolds in the weeks and months following the event. 
  • BTC halving is nearly 81 days away and the asset is likely to see a significant recovery from its recent drawdown, if the pattern from the previous halvings repeats. 
  • Combined with this catalyst, the deceleration of GBTC withdrawals and Bitcoin’s long-term holders staying put has fueled the thesis of BTC price rally. 
  • GBTC withdrawals slowed down over the past week, as the bleed ends, Bitcoin could make progress towards its realized cap. Glassnode’s recent report on Bitcoin reveals that the realized cap is a negative 5.4% shy of its previous all-time high of $467 billion, amidst strong capital inflows. 
  • The duration for recovery relies on how quickly the GBTC bleed is plugged. 

Bitcoin realized cap drawdown. Source: Glassnode 

  • Another key metric that supports a bullish thesis for Bitcoin price is holdings of long-term holders in the three year and five year bands. While BTC held by traders for one and two-year periods has been on the move for a few weeks now, long-term holders are steady. 
  • Holdings of Bitcoin’s long-term holder bands are close to their all-time highs, according to Glassnode data. This is key to BTC price gains thesis as holders control a large percentage of Bitcoin supply and are most likely to influence the selling pressure on the asset, if they decide to take profits, shed their holdings. 

BTC

Bitcoin supply last active age bands. Source: Glassnode 

  • Ahead of the halving event, Bitcoin continues to show resilience and the asset is swiftly recovering from the sell-the-news volatility that followed ETF approvals by the SEC. 

Technical Analysis: Bitcoin price could reveal directional bias soon

Akash Girimath, technical analyst at FXStreet, evaluated the Bitcoin price trend and stated that investors need to be mindful of BTC price action before opening a long position in the asset. For a sustained uptrend, BTC price needs a daily candlestick close above the $48,222 level. 

BTC

BTC/USDT 1-day chart

Until Bitcoin price closes above this key level, the daily imbalance zone that extends from the $41,396 to $40,288 level is an important area to watch. Traders need to be mindful of a rise in selling pressure that threatens to push BTC price through the imbalance zone and produce a lower low in Bitcoin. BTC could find support at $34,067 and $32,293, in the event of a steep correction in the asset. 

Bitcoin price is $42,981, at the time of writing.

Bitcoin, altcoins, stablecoins FAQs

Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.

Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.

Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.

Bitcoin dominance is the ratio of Bitcoin’s market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.




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