Could the bitcoin price stabilize after the GBTC sell-off? And to what extent does the continuation of BTC's downward momentum look limited?
Bitcoin’s price has already stabilized after the sell-off on January 12, 22-23. By the time of writing, the BTC/USDT pair rebounded to $41,179. GBTC selling has subsided. The price action rebounded from the $38,500 support.
The scope for further decline in the bitcoin price looks limited for several reasons:
1. Major outflows from GBTC’s spot bitcoin ETF are now in the rear-view mirror. Although some withdrawals will continue, they will be less significant. In our view, the sell-off has peaked.
2. Support levels lie at $36k and $38,500. These are considered as buy-in points by investors ahead of the halving event.
3. Institutional interest in crypto assets remains high, underpinning demand for the flagship digital cryptocurrency.
Thus, a sharp decline looks unlikely. Instead, we expect to see the price action stabilize above $40k and a new upward trend after February 10, or a breakout above the $43,500 resistance level. That said, a deep correction cannot be completely ruled out. The market remains sensitive to SEC decisions and statements.