FTX Estate Selling $1 Billion USD in Bitcoin ETF Shares

Interesting start to this week, ​​as we see FTX back in the news for the first time in 2024. 

The FTX Estate could have taken advantage of a price markup in Grayscale Bitcoin Exchange Traded Fund (ETF) upon its conversion to a spot ETF. Reportedly 22 million shares have been sold since the 11^th of January (close to $1 billion USD), taking the FTX balance sheet GBTC exposure to zero.

Since the spot ETF launch in the US on the 10^th of January, Grayscale’s Bitcoin Trust (GBTC) ETF has changed in structure, resulting in a jump in GBTC share valuations. Created in 2013, GBTC was previously tied to Bitcoin derivatives, financial instruments that derive value from Bitcoin’s price changes. The previous structure attracted higher fees and management costs than current spot ETFs. Currently, GBTC is directly backed by actual Bitcoin, which has led to an equal correlation to Bitcoin’s price movements.

This is in line with the overall performance of the GBTC ETF product since the conversion occurred earlier this month, with investors selling adding up to just over $2 billion USD.

Is this the turning point for the major investors’ sell-off in Bitcoin? I’m staying optimistic this marks the beginning of a positive shift in the overall mood, especially after the pervasive negativity following the ETF’s launch.

Bitcoin – BTC

Very interesting level that we find Bitcoin at currently leading into the back end of the week. I think the next week or so will start to paint a picture of whether we have a window to head higher meaningfully – or if we are setting up for another leg down. 

In a recent video I published on my YouTube channel, I discussed how a short term extended rally on Bitcoin could set up a big move higher for altcoins. 

Technically speaking, two scenarios may play out over the coming days.

Bullish scenario 

Buyers taking control, positioning Bitcoin back above the dotted line ($40,200 USD), and moving back to retest the area we broke down from (red arrow). 

Bearish scenario

Failing to get above the dotted line, Bitcoin starting to move down for another leg lower. 

Altcoins are currently in a delicate situation. If Bitcoin experiences a downturn, we can anticipate widespread volatility in the cryptocurrency market.

Celestia – TIA

In recent weeks, Celestia has continued to be a high performer, with strong spot demand that could be potentially due to its modular blockchain staking rumoured to have more airdrops to come for those supporting the network. 

Celestia is in a descending channel with a deviation on the bottom of the range on the 23rd, followed by a rally back to the top on the 25th of January. With a technical pattern like this, we would be looking for 2 potential outcomes. 

There’s no set timeline, but TIA currently shows a significant imbalance in its long and short contract balances. Right now, most traders are anticipating a decline. If they’re mistaken, we might see a rapid ‘melt-up’ as these short positions close, triggering a surge in buying.

Pyth Network – PYTH

After the continued success of Chainlink (LINK) through 2023, Pyth Network has gained traction as the latest network oracle on the block. They were also well known for an airdrop to a range of ecosystem participants. It sits in an area of interest, technically speaking, heading into the end of the week. 

Using range analysis, we can map out last week’s high and low as areas of interest. From a technical perspective, the important areas to look for potential opportunities are at the range extremes and mid-point. Two scenarios may play out as we are currently at the midpoint range. 

Once a range extreme is reached, there is no telling if it will continue trending or reverse. But, levels to keep an eye on once we get there. 

See you all again next week.

Keep up to date

I’ve recently launched my own YouTube channel Crypto with Pav where I give bi-weekly updates on what to expect next in Crypto. You can also follow me over at X for regular updates.

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