On January 30, the Bitcoin [BTC] mining ecosystem witnessed its most substantial sell-off in eight months, with over 4,000 bitcoins making their way to spot exchanges. However, the market managed to absorb the funds, valued at $173 million, without significant turbulence. This surge in coin movement marked the highest since May 16, 2023, sparking concerns about intensified sell pressure.
In total, more than 4 thousand BTCs flowed to spot exchanges, representing around $173 million in selling pressure.
A detailed analysis by CryptoQuant provided valuable insights into the situation, revealing that mining portfolios’ reserves remained unaffected throughout January. Despite notable interactions with exchanges during this period, it’s crucial not to jump to conclusions about miners dumping coins, as the analysis may not consider the eventual return of these bitcoins to miners’ wallets.
The broader BTC market exhibited resilience, bouncing back from the initial sell-the-news dip following the approval of exchange-traded funds [ETFs]. Investors realigning their capital out of the Grayscale Bitcoin Trust [GBTC] contributed to significant supply overhead, but the market navigated through this challenge.
The recent dump of GBTC by FTX has concluded, with Bitcoin ETFs experiencing substantial net inflows. As reported previously, FTX’s bankruptcy estate orchestrated a massive sell-off, revealing critical insights into the outflows from the world’s largest BTC ETF, which manages over $28.6 billion in assets. The conversion of GBTC into an ETF triggered substantial investor withdrawals, with more than $2 billion exiting the platform, a significant portion of which came from FTX’s liquidation of 22 million shares.
Bitcoin’s Road To Recovery After GBTC-Induced Slump
Bitcoin’s value had dipped by more than 20% in the two weeks following the launch of spot BTC ETFs in the U.S. Profit-taking by GBTC investors, who had acquired the fund at a discount to its net asset value [NAV], played a pivotal role in the correction. However, according to a recent JPMorgan report, Bitcoin has rebounded from the recent slump as the selling pressure from GBTC has largely subsided, signaling a positive outlook for the digital asset.
With an $840 billion market capitalization, the leading cryptocurrency has stabilized at $42,980, registering an 8% increase in the weekly index.