Bitcoin price is struggling to recover from the sell-off triggered by the green light for 11 BTC ETFs. The market mood is still gloomy as investors worry about the impact of these new products. However, there is hope that the Bitcoin halving in 2024 will boost the leading crypto’s momentum and keep it on an upward trajectory.
If that happens, investor confidence will gradually return in the coming weeks. Nevertheless, addresses with more than zero balances are falling according to blockchain data by Santiment. This bearish sentiment can be attributed to “crowd FUD, and less interest in direct BTC ownership,” thanks to alternative investment vehicles.
📉 #Bitcoin’s wallets (with greater than 0 coins) are still declining as #crypto nears 4 weeks since the #SEC’s 11 Spot #ETF approvals. This can be attributed to crowd #FUD, and less interest in direct $BTC ownership due to other investment alternatives. https://t.co/tjnjELxGw1 pic.twitter.com/xRymU7C0ro
— Santiment (@santimentfeed) February 7, 2024
Miners Selling Ahead of Bitcoin Halving 2024
A new trend is emerging with persistent growth in daily net inflows into BTC ETFs. According to data from SoSoValue, February 5 marked the largest single-day net inflow, topping $68 million.
The daily total net inflow at the time of writing on Wednesday is $33 million. Cumulatively, ETF products boast $1.68 million in total net inflow. BlackRock’s IBIT emerges as a formidable contender, posting $45 million in net inflow volume followed by $37 million in FBTC.
Bitcoin ETF data | SoSoValue
Although the outflow on Grayscale’s ETF (GBTC) is a tad bit concerning, the volume has noticeably decreased, Lookonchain reveals with daily updates.
Feb 7 Update:#Grayscale decreased 2,565 $BTC($110.6M).
8 ETFs added 2,384 $BTC($102.8M), of which #iShares(#Blackrock) added 1,048 $BTC($45.2M).https://t.co/eMNFPYDpDF pic.twitter.com/taLD14PkqT
— Lookonchain (@lookonchain) February 7, 2024
From the face value of things, increasing investor attention to spot ETF products is positive for Bitcoin price. However, this outlook has been dampened by reducing miner reserves.
Miner reserves refer to the amount of BTC stored in miner treasuries. Over the last few weeks, since the ETF green light, miner outflows have skyrocketed, hitting levels last seen in June 2021, the CrptoQuant report states.
Another report by crypto exchange Bitfinex highlighted that miners sent over $1 billion in BTC to exchanges on January 12, just after ETFs started trading. Miners are likely to have sold to cash out after a staggering increase in Bitcoin price to a two-year high.
Miners are moving their Bitcoin reserves out of their wallets for two reasons. One is that they might be cashing out some of their profits. The other is that they might be borrowing against their Bitcoin to fund new equipment. They want to be ready for the halving, which will reduce the reward for mining new blocks.
The Bitcoin halving in 2024 is anticipated in April and will cut miner rewards by half, potentially reducing profit margins and driving smaller players out of business or forcing them to seek mergers with other entities to survive.
This persistent selling by miners could be attributed to the slow momentum in Bitcoin price in the past few weeks. After the ETF approval, BTC price plunged by 20% below $39,000 from a yearly peak of $49,000.
Although BTC has climbed above $40,000 and almost closed in on $44,000 at one point, it holds at $43,500.
Read also: Can You Become A Millionaire With These 3 Budget Cryptos?
Bitcoin Price Forecast: Can BTC Rise To $48,000 In February?
Bitcoin price sits above three bull market indicators the likes of the 200-day EMA at $36,393, the 50 EMA at $42,174, and the 20-day EMA at $42,599 (the purple, red, and blue lines on the chart).
Bitcoin price chart | Tradingview
The Moving Average Convergence Divergence (MACD) reinforces the bullish theory with a buy signal backed by green histograms above the neutral line. As BTC ascends to higher levels, confidence will build among investors targeting $48,000 in February.
The halving in April will significantly reduce Bitcoin’s supply and with demand either increasing or staying the same, a rally is mostly likely to follow. Caution is advised even though past halving events have sent BTC to new highs. Besides, the post-halving rally tends to occur several months after the actual event with Bitcoin expected to top out in 2025.
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