More than 30% Pullback?

gadrian in LeoFinance • last year

Many would say that a "sell the news" event post-bitcoin ETFs approval was to be expected - and maybe it was -, but the amplitude is a bit interesting.

Let's say some big players were set to take profits right after the approval, which would make sense. But at the same time, were floods of fiat anxiously waiting to buy in? Maybe not floods, but they are slowly coming in.

At the same time, it looks like most ETFs played right the discounted or delayed fee war, and one big player clearly lost this game so far. The ones with a temporary discount understood well the investors' psychology, and that they will be attracted by the lower fees, even if they may rise in the future. Grayscale thought its investors wouldn't flee because of the high fee they had set, because that would trigger a taxable event. Looks like they were mostly wrong. Once it was clear a selloff had started, many of its investors would have now two reasons to leave them: one, to take profit, and two, to avoid the much higher management fee. Yes, that's a taxable event, but maybe they'll find other ways to compensate and still pay less taxes. Rich people often do.

Overall, more funds were pushed into the bitcoin ETFs during the first days after the approval than were taken out of GBTC, Grayscale's Bitcoin Trust.

And yet, the price of bitcoin went down, which means other big players were selling too. The problem is I believe GBTC will continue to bleed out - unless they change something - and still has plenty of bitcoin. I suspect some of the funds taken out of GBTC will be distributed to other ETFs, but we'll have to see. Either way, that means selling pressure on bitcoin from Grayscale, and buying pressure (so far) from the rest of the bitcoin ETFs.

Here's something else we should take into account. Up to 30% pullbacks on bitcoin during bull markets are common. Higher than that, not so common. That's why I am curious if bitcoin finds a strong support around 37-38k, or breaches it to lower levels.

If the hemorrhage from Grayscale continues on high volumes this week, we might see a 35k, maybe. But if that happens, I believe it will be short-lived, because buyers will start to kick in more aggressively.

Anyway, the market is what it is these days. It doesn't help that Grayscale is probably the biggest known holder of bitcoin, outside Satoshi Nakamoto and Binance, and is bleeding (forced to sell due to withdrawals). And there is that saying: when bitcoin sneezes, alts catch a cold. I don't like it, but it is kind of proven over time to be true.

Personally, I'm hoping for this support to hold at 37-38k. But we will see...

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#bitcoin #crypto #pullback #grayscale #proofofbrain #hive-engine #cent #archon #leofinance

last year in LeoFinance by gadrian

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outwars last year

This is interesting. It goes against what a lot of people expected would happen once the BTC ETFs were approved. I would like to think people were taking profit earlier, but are a bit fearful right now. With BTC halving coming soon, I think this is just the dip that big corporations want to get more BTC.

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gadrian last year

To be honest, I did expect some euphoria after the approval too. But I did miscalculate something. I thought there was going to be a gap between their approval and the time they were traded. It was practically none. Thus, the "sell the news" type of action applied perfectly. I admit I didn't sell. But I did buy the dip a little bit.

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jfang003 last year

Grayscale's fee was kind of too high. I think people just thought it would be better to avoid it and I guess it's the problem with grayscale buying so much BTC. I guess they will need to sell some of it off and it will remove the weak hands in the crypto space. Maybe we can see the bull market after.

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gadrian last year

Maybe the pullback is over... Grayscale made a mistake, in my opinion. That shows that big Wall Street firms "bet" on the wrong horse more often than we might think of.

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relf87 last year

Hmm I think zooming out, we are probably in a better place compared to perhaps 6 months or a year ago. So I remain optimistic that BTC will do ok (well) over the medium term. Will just hold. :)

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gadrian last year

Oh, for sure! I'm very bullish on how the end of the year (or in some cases 2025) will look in the crypto land.

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curatorcat.leo last year

The thing that sometimes worries me is that crypto — in general — has entrenched itself so thoroughly as "invenstments" rather than things that actually get used that the markets will become entirely investor driven, rather than user driven.

It's almost like real estate: Houses are less and less "your home" and more and more "an investment."

=^..^=

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gadrian last year

Hmm, I can't disagree with you. In that sense, the internet was user-driven, not investor-driven, and that's why the comparison between crypto+blockchain and the internet may not be as accurate.

Well pointed out the change of approach in real estate too.

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wanderingmoon last year

I'm sitting back laughing at the whole thing. To think that these people could overtake decentralization is down right laughable. 😀 😀

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gadrian last year

When decentralization almost begs to be taken down and is in many cases just a buzzword, it doesn't take much to do it.

I have the conviction there will continue to be pockets of decentralization in the crypto world and people who build based on these principles, but I don't hold much hope for the major ecosystems.

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wanderingmoon last year

I don't know about that. Look how long it took the internet to become what it is today. 😊

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gadrian last year

Yep, but things are speeding up in the tech world, and we're already 15 years into the crypto era. In 10 more years, it will be already a mature tech.

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djbravo last year

Once again we are seeing panic in the market and we are seeing people selling their bitcoins which is causing the market to look down but the sane people are picking on it. We will understand and definitely take entries into it here because within the next three to four weeks the market will once again see us up there.

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gadrian last year

I agree. Those who panic in these moments will end up regretting in a couple of months.

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djbravo last year

Yeah.

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rafzat last year

People are really sad and they are panicking, lol
Things will be back to normal but I feel el it will be after BTC halving
Let’s see how it goes

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gadrian last year

Panic is the enemy in these moments. That's how people end up selling at the bottom.

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biyimi last year

We might be heading for a massive downtrend

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gadrian last year

Nah, I think it's mostly over. It can still go down from here, but the biggest part of the pullback is over, in my opinion.

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adcreatordesign last year

Thank you for your input on Grayscale @gadrian. To me it doesn't seem right what Grayscale allows. It seems crooked to me. A lot of the things the markets do in Wall street and with the btc seem wrong to me. I believe in btc and the good it can do, but it some of the things the financial institutions do seem very wrong - crooked.
Have a nice rest of the week. Barb !BBH !CTP #ctp

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gadrian last year

In fact, Grayscale was probably the most honest of them, holding that management fee high despite the signals that it was going to cost them customers. The others will probably increase their fees after a "honeymoon" period, which is more perverse than what Grayscale did. But, in the end, in these banking or investment firms' games, customers are usually the ones who are left paying the bills.

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adcreatordesign last year

OK thank you @gadrian. I will remember that Grayscale is the most honest of them. Yes that is terrible about all of the customers stuck with the bills!