Bitget Hot Takes (January 15 - January 21, 2024) - Market Updates
Bitget Hot Takes is the exclusive weekly newsletter series by Bitget Academy, which sums up what's new at Bitget, and the latest market movements.
The latest Bitget Hot Takes can be found here.
Central Themes
• All 11 spot Bitcoin ETFs lost 10-20% in prices since their launch after 7 consecutive red days.
• Grayscale Bitcoin Trust is the only fund with a negative net flow; the total net flow of spot and futures Bitcoin ETFs amounts to US$450 million in W3 2024.
• The global crypto market cap lost 3.2% by the end of January 21; greed stamina has been dissipating.
• BTC receded to a new low of US$39,450 on Monday.
Week 3: The Moon Is Waning
As we explained before, after spot Bitcoin ETFs in the U.S. there's supposed to be chaos. Bitcoin prices went from nearly US$49,000 on January 11 after the long-awaited ETF approval to US$41,500 at the end of Sunday (January 21), which is equivalent to a loss of US$7,400 or 15%.
First off, let's greet our new friends with the warmest welcome: this is crypto, where Bitcoin prices oftentimes drop after you grab some. Recall the last time you opened your phone and FOMO bought Bitcoin because of ETF approval rumours? The momentum kept going up until the actual launch; it's now time for active investors to realise their profits a.k.a. ditch BTC for gains. They can be short-term traders who executed their 'buy the rumour, sell the news' strategy with perfect timing or BTC holders who want to scoop some quick profits. The thing is, many, especially new retail traders, have problems regulating their emotions and tend to place buy orders in fear of missing a life-changing opportunity, and thereby creating the demand for a particular group of profit-seekers to unload their holdings. And the magnitude of this collective selling act is usually so great that it impacts Bitcoin in a negative way that causes panic and further brings down prices.
A prime example of that is the recent GBTC dumping, which is covered here: Understanding the Recent GBTC Sell-Off: Causes and Impacts on Bitcoin Price. Does this downward spiral mean the end of Bitcoin and crypto as a whole? There're some factors to consider: despite the Bitcoin price plunging, total net flow last week into 11 spot Bitcoin ETFs still amounts to US$363,643,000 and US$85,470,000 into the three biggest futures ETFs (BITO, BITI, BITX), and the fee war between spot Bitcoin ETFs. No matter before or after its conversion to a spot Bitcoin ETF, Grayscale Bitcoin Trust is well-known for its hefty management fees. It's therefore justifiable to interpret the exodus of GBTC investors as the relocation of capital into other funds.
However, the damage is done: Bitcoin fell to its lowest levels since early December 2023, net flow into spot ETFs decreased by almost 50%, all spot ETF prices saw red for seven consecutive days, the combined volume of all spot ETFs from January 16 - January 19 is only slightly higher than that of the first two days and the volume of all crypto stocks declined by more than half, the average bleeding rate of miners is 12.5%. We're no longer in a phase of intense Greed - the market sentiment is now back to Neutral at 55/100.
The new narratives that serve as hopium for the upcoming months are spot Ethereum ETFs, Bitcoin halving, options on spot Bitcoin ETFs, and leveraged spot Bitcoin ETFs. Again, don't forget that FOMO is never a friend of any trader/investor. Here are some of our guides on how to avoid emotional trading: The Trap Of Trading Temptations | Dealing With Temptations | Master Trading Psychology: Stick to Your Personal Ideal Prices to Maximize Profit and Minimize Loss | Master Trading Psychology: Navigate Loss and Profit
Setting The Tone: Monday Performance
Bitcoin prices continued to slide from US$41,546 at Sunday's closing time to hit a two-month low of US$$39,450 on Monday (January 22), reflecting a decrease from 55 to 50 in market sentiment. As a result, the global market cap lost another 4.1% in value to stand at US$1.63 trillion when Monday closed and almost all crypto stocks saw red, except for Coinbase (COIN), ProShares Short Bitcoin Strategy ETF (BITI), and the majority of Bitcoin mining stocks. It doesn't look like we can benefit from the recent tech stock rally, hence make sure to tie up loose ends of your strategy and be the diamond hands we have always been since the beginning.
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Good Reads
Bitget Card: Unlocking the World of Crypto
Bitget Card: An Ultimate Tutorial
Trade Any Token, Anywhere: Bitget Spot P2P Market
The Resurgence of NFTs: A Glimpse into the Potential Growth of NFT in 2024
All You Need To Know About Ethereum Dencun Upgrade
Understanding the Recent GBTC Sell-Off: Causes and Impacts on Bitcoin Price
BabyDragon (BABYDRAGON): The Symbol of Power, Security, and Future Success in Crypto
TSUGT: When Crypto Meets Manga Football
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