Bitcoin tends to sell off on news of ETF approvals, and the recent drop was expected.
The key resistance level of $48,000 to $50,000 played a role in the drop.
Outflows from grayscale funds and profit-taking by smart money investors contributed to the drop.
If the stock market continues to rally, Bitcoin may catch up and recover.
A 50% drop in the stock market could lead to Bitcoin retesting the $15,000 level.
Why did the price of Bitcoin drop after the SEC approved Bitcoin ETFs?
—Bitcoin tends to sell off on news of ETF approvals, as seen in previous bull markets. This selling pressure is due to profit-taking by smart money investors and the expectation of a temporary correction.
What role did the resistance level of $48,000 to $50,000 play in the drop?
—The resistance level of $48,000 to $50,000 is a key level that has marked previous highs and acted as a selling point for traders. When Bitcoin reached this level, it faced selling pressure and triggered a correction.
Why did outflows from grayscale funds contribute to the drop?
—Grayscale funds, specifically GBTC, had been trading at a discount, and smart money investors bought Bitcoin ahead of the ETF news. After the news, these investors took profits, adding to the selling pressure.
Can Bitcoin recover if the stock market continues to rally?
—If the stock market continues to rally, the risk-on trade may absorb the selling pressure in Bitcoin and potentially push its price back up.
What could lead to Bitcoin retesting the $15,000 level?
—A significant drop in the stock market, such as a 50% correction, coupled with a recessionary environment and inflation concerns, could cause Bitcoin to retest the $15,000 level.
00:00The recent drop in the price of Bitcoin, despite the SEC approving Bitcoin ETFs, was expected as Bitcoin tends to sell off on news of ETF approvals. The resistance level of $48,000 to $50,000 also played a role in the drop. Outflows from grayscale funds and profit-taking by smart money investors contributed to the selling pressure.
03:34If the stock market continues to rally, Bitcoin may catch up and recover. However, there is a possibility of a market top or a recession that could lead to a further drop in Bitcoin's price. In such a scenario, Bitcoin could retest the $15,000 level.
