Bitcoin’s price dropping below $60,000 could have significant consequences for investors in U.S. spot BTC ETFs, according to analysts at 10x Research. The average entry price for buyers of these ETFs is estimated to be between $60,000 and $61,000. If the price falls below this range, it could trigger a wave of liquidations.
Markus Thielen, the founder of 10x Research, pointed out that traders often mistakenly view round numbers like $60,000 as critical support or resistance levels. In the case of Bitcoin, however, the $60,000 level is currently being closely watched and could prove to be important. Thielen emphasized that re-testing this level could lead to a significant number of liquidations among ETF investors.
Despite the anticipation of institutional buying, Thielen noted that the majority of inflows into U.S. spot bitcoin ETFs have come from existing crypto market participants. This contrasts with earlier expectations that heavyweight institutions like sovereign wealth funds and pension funds would drive significant demand for these ETFs.
Recent factors contributing to Bitcoin’s price decline include increased selling pressure from miners and long-term holders, as well as Germany’s decision to divest its crypto holdings. Additionally, concerns about potential selling pressure stemming from the reimbursement process for users of the defunct exchange Mt. Gox have also weighed on the market.
Bitcoin is currently trading at around $60,200, down 4% over the past 24 hours. Earlier on Friday, the price briefly dipped below $60,000 before recovering slightly. The overall downward trend in Bitcoin’s price over the past few weeks has been attributed to a combination of factors, including increased selling activity and market uncertainties.
As the cryptocurrency market continues to evolve, investors and analysts will be closely monitoring key price levels and market dynamics to assess the potential impact on ETFs and overall market sentiment. The fluctuating nature of Bitcoin’s price underscores the importance of staying informed and being prepared for potential market volatility.