The recent decrease in the price of Bitcoin is reminiscent of its behavior following the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States in January. One trader suggests that this could signal an upswing in the coming week.
On April 30, spot Bitcoin ETFs were launched in Hong Kong, attracting approximately $217 million in net inflows. However, the price of Bitcoin has dropped by nearly 7% since the launch, according to data from CoinMarketCap.
Quinten Francois, co-founder of WhereAt Social and a crypto trader, points out the similarities between this behavior and the launch of spot Bitcoin ETFs in the U.S. In that instance, Bitcoin’s price fell by 14% within 12 days of the launch but then rose by 7% over the following seven days. If Bitcoin continues to follow this trend, Francois predicts an upswing in the next week.
StockLizard, a pseudonymous crypto trader, adds, “There is no straight line to the top. Price correction was more than needed.”
However, there are some notable differences between the two launches. While the Hong Kong Bitcoin ETFs have attracted $217 million in net inflows since their launch, U.S. ETFs experienced $794 million in outflows during the same period.
Furthermore, the Hong Kong-based ETFs had only $12.4 million in trading volume on their first day, a significant difference from the $4.6 billion first-day trading volume of U.S. spot Bitcoin ETFs.
The launch of the Hong Kong ETFs also coincided with the Bitcoin halving, which often leads to a period of sideways price action. Additionally, tensions in the Middle East and the U.S. Federal Reserve’s decision to maintain high interest rates have contributed to the current market conditions.
Eric Balchunas, an ETF analyst at Bloomberg, argues that the $217 million figure is impressive considering Hong Kong’s relatively small size compared to the U.S.
Some traders are concerned that the inflows from Hong Kong may not be enough to offset the recent outflows from the U.S., which could prevent a similar breakout pattern.
“Hong Kong Bitcoin ETFs are not enough to absorb US ETF selling pressure,” stated the crypto trading team TOBTC.
On the other hand, some traders believe that the recent price decline is a healthy correction for Bitcoin’s price.
“The longer the Bitcoin consolidation takes, the higher its price will meet the trendline,” stated crypto trader Titan of Crypto.
Crypto commentator CryptoCon added, “Bitcoin’s most recent correction was much needed for price going forward.”
Handre van Heerden, the founder of AirBtc, echoed these sentiments, saying, “The thing Bitcoin critics don’t understand is that we simply don’t care if the price drops.”
Please note that this article does not provide investment advice or recommendations. All investment and trading decisions involve risks, and readers should conduct their own research before making any decisions.