- Reports indicate that FTX liquidators sold about $1 billion of Grayscale's spot Bitcoin ETF.
- The chunk represents one-third of total outflows, indicating selling is now done, in theory.
- An analyst and crypto executive anticipate a possible short squeeze after a potential bounce.
- CNBC Mad Money host Jim Cramer also hints at a possible move north in Bitcoin price.
Bitcoin (BTC) price broke below the ascending parallel channel during the January 12 crash that saw upwards of $130 million in total liquidations. Despite multiple technical indicators hinting at a possible extension south, one analyst and crypto executive has provided a different outlook centered on Grayscale spot exchange-traded funds (ETFs) sales.
Bitcoin price could bounce as FTX liquidators sell about $1 billion GBTC
Billions of dollars worth of Bitcoin have been pulled out of Grayscale spot ETF (GBTC) since the investment products started trading on January 11. Citing persons close to the matter, a Coindesk report indicates that FTX accounted for much of these outflows after the exchange’s liquidators sold 22 million shares worth nearly $1 billion, taking FTX's GBTC ownership down to zero.
SCOOP: @FTX_Official sold about $1 billion of @Grayscale's $GBTC since #bitcoinETF approval – explaining a large chunk of its outflow.@IanAllison123 reportshttps://t.co/9t04mPvFhT
— CoinDesk (@CoinDesk) January 22, 2024
Specifically, the sales represent up to one-third (1/3) of the total outflows, with the report alluding to FTX completing the sale of its substantial holdings. This means that the exchange may not have any more GBTC to sell, with easing selling pressure likely to catalyze a bounce, according to Ran Neuner, founder of Crypto Banter.
Wait, if $1bn of the selling in GBTC was FTX LIQUIDATORS as reported, that is 1/3 of the total outflows. That changes the entire picture!!!! That selling is now done.
— Ran Neuner (@cryptomanran) January 22, 2024
We could actually get a bounce now and that could trigger a short squeeze.
Along with the bounce, Neuner anticipates a short squeeze. This is an unusual condition that triggers a rapid rise in the price of an asset. It occurs when the asset has many short sellers, meaning lots of investors are betting on its price falling. The short squeeze begins when the price jumps higher unexpectedly and gains momentum as a huge number of the short sellers decide to cut losses and exit their positions.
The news comes as FTX liquidators continue pushing toward securing funds for the exchange’s creditors amid an ongoing legal battle after the court approved the conversion of Grayscale’s GBTC into a spot BTC ETF. FTX sister firm Alameda Research reportedly had upwards of $9 billion in investor funds locked in Grayscale's Bitcoin Trust (GBTC) in the wake of the FTX implosion. GBTC holders were unable to easily exit their positions while the product was a trust.
Experts anticipate a bullish move in Bitcoin price
Meanwhile, experts anticipate a bullish move in Bitcoin price, with Glassnode co-founder Yan Allemann spotting a “Bullish divergence into Descending Wedge,” adding, “I think you will be very disappointed with your expectations of a break lower.”
Bullish divergence into Descending Wedge!
— (@Negentropic_) January 22, 2024
I think you will be very disappointed with your expectations of a break lower. https://t.co/CWRKFrfwGj pic.twitter.com/FygPtENuCm
CNBC’s Mad Money host, Jim Cramer, said, “Unlikely that Bitcoin finds its footing”, which reinforces the bullish supposition by Allemann.
Unlikely that Bitcoin finds its footing
— Jim Cramer (@jimcramer) January 22, 2024
This is because the Mad Money host has earned a reputation as the ‘Inverse Cramer,” and despite indications that he may have revised his stance on BTC, this does not invalidate his inverse reputation. Case in point, Cramer declared Bitcoin ‘indestructible’ ten days before the January 12 crash.
At the time of writing, Bitcoin price is trading for $40,686, representing a 2.45% drop on the day.
BTC/USDT 1-day chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
VanEck sees Bitcoin reaching $61 trillion market cap, Marathon buys $100 million BTC
![VanEck sees Bitcoin reaching $61 trillion market cap, Marathon buys $100 million BTC](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Bitcoin/bitcoins-33758372_XtraSmall.jpg)
Bitcoin declined by 1% on Thursday following asset manager VanEck's forecast that the top digital asset will reach a $61 trillion market capitalization by 2050.
Ethereum Classic price sets for a rally following retest of key support
![Ethereum Classic price sets for a rally following retest of key support](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/Coins/EthereumClassic/ethereumclassic_XtraSmall.jpg)
ETC edges higher by 2.3% and trades around $22.60 at the time of writing on Friday after testing a key support area the day before. On-chain data showing increased account growth suggests a bullish move ahead. Ethereum Classic price faced rejection by the daily resistance level of $25.13 earlier this week.
Celebrity meme coins lose their shine
![Celebrity meme coins lose their shine](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/crypto_matrix-637516561995093295_XtraSmall.jpg)
Celebrity meme coins report by Jupiter Slorg on Thursday shows that these tokens have been in deep waters since early July after experiencing heavy growth in June. In a recent analysis, Jupiter Slorg revealed that celebrity meme coins are down by an average of 94% from their all-time highs.
Ripple gains 5%, Mark Cuban says Kamala Harris’ nomination could affect SEC lawsuit
![Ripple gains 5%, Mark Cuban says Kamala Harris’ nomination could affect SEC lawsuit](https://editorial.fxstreet.com/images/Resources/CryptoWorldSEO3_XtraSmall.jpg)
Ripple (XRP) made a comeback above key psychological resistance early on Wednesday. Crypto traders are optimistic after the Ethereum Exchange Traded Fund (ETF) launch. Entrepreneur and investor Mark Cuban recently shared his comments on how Kamala Harris’ nomination to the Presidential elections could influence crypto regulation.
Bitcoin: Will BTC manage to recover from recent market turmoil?
![Bitcoin: Will BTC manage to recover from recent market turmoil?](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Bitcoin/bitcoin_closer_XtraSmall.jpg)
Bitcoin recovers to $67,000 on Friday after finding support around $63,500 a day before. Still, BTC losses over 1.50% on the week as Mt. Gox persists in transferring Bitcoin to exchanges.