Analyst Warns: Bitcoin’s Drop Below $60K Could Spark ETF Sell-Off
The U.S. spot BTC ETF buyers are currently positioned with an average entry price ranging between $60,000 and $61,000, and a breach beneath this bracket could trigger a cascade of liquidations, as highlighted by insights from 10x Research. Markus Thielen pointed out that the anticipated institutional surge in ETF acquisitions has not materialized yet.
In the realm of trading, individuals often mistakenly identify whole numbers as pivotal levels of support or resistance. However, in the case of Bitcoin (BTC), the current flirting with the $60,000 threshold could genuinely hold significance.
Markus Thielen, the founder of 10x Research, emphasized, “We estimate that the average bitcoin ETF entry price is $60,000 to $61,000, and revisiting this range may lead to a wave of liquidations.” Since their introduction on January 11, the 11 U.S. spot bitcoin ETFs have attracted over $14 billion in net inflows, as reported by Farside Investors. Thielen pointed out that 30% of these inflows are attributed to a non-directional arbitrage technique known as the basis trade, rather than outright bullish speculations.
Bitcoin experienced a dip below $60,000 in late April, reaching a low of approximately $56,500 following statements from BlackRock indicating the potential participation of heavyweight institutions like sovereign wealth funds, pension funds, and endowments in spot ETF trading. Nonetheless, JPMorgan recently disclosed that 80% of the capital inflows into spot ETFs originated from existing participants in the crypto market.
Markus Thielen remarked, “When Bitcoin dropped to $56,500 on May 2, Blackrock suggested that ‘sovereign wealth and pension funds’ were entering the market. This announcement helped halt the decline. However, Blackrock has now revealed that 80% of their Bitcoin IBIT ETF acquisitions stem from retail investors, not institutional entities.”
Over the past four weeks, Bitcoin has encountered a nearly 14% decline, primarily attributed to accelerated sales by miners and holders of long-standing wallets, Germany’s divestment of crypto assets, and concerns that reimbursements by the now-defunct exchange Mt. Gox might trigger a selling spree. Presently, Bitcoin is down by 4% in the last 24 hours, trading at $60,200, with a brief drop below $60,000 earlier on Friday morning.
