Grayscale’s Bitcoin sale unlikely to have driven BTC price lower, profit taking is likely driver

Grayscale sold above 60,000 BTC while other Bitcoin ETF issuers have purchased over 72,000 BTC.
Grayscale’s Bitcoin sale is unlikely to have driven the BTC price lower.
Profit-taking by large wallet investors and traders is likely the catalyst for the increasing selling pressure and BTC price drop.

Grayscale, one of the largest crypto asset management firms and one of the issuers of the Bitcoin Spot ETFs, sold 60,000 BTC. While it may seem obvious that Grayscale’s Bitcoin sale likely increased the selling pressure on BTC, experts have presented an alternative view. It is likely that profit-taking activities by large wallet investors drove BTC price lower.

Also read: Dogecoin volume and social dominance hits 2024 peak as X launches dedicated payments account

This factor influenced Bitcoin price in the aftermath of ETF approval

According to a CryptoQuant expert, Julio Moreno, Bitcoin price correction is likely due to the profit-taking activities of traders, rather than Grayscale’s BTC sale. The expert addresses the narrative circulating on crypto Twitter and notes that the correction in Bitcoin price is likely on a decline due to the sale of BTC by Bitcoin holders.

The profit-taking spikes coincided with the large volume transactions valued at $100,000 and higher.

Bitcoin network realized profit/ loss and whale transactions. Source: Santiment

Between January 7 and 21, BTC on exchanges climbed from 5.34% to 5.40%. The rising supply on exchanges is typically considered as a factor that drives asset prices lower.

Bitcoin supply on exchanges and price. Source: Santiment

The expert dismissed the narrative that Grayscale’s Bitcoin sale is driving down prices, explaining that while Grayscale sold 60,000 BTC, other issuers acquired nearly 72,000 BTC. This is likely to have tackled the selling pressure from the former’s sale. Demand for the asset has likely increased with institutions lining up to acquire BTC, post SEC’s ETF approval.

At the time of writing, Bitcoin price is $41,739 on Binance.

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.