As Bitcoin continues to embark on a major price rally, market strategist and investor Joao Widson has provided an update. In-depth examination On how exchange-traded funds (ETFs), and in particular the German ETC Group Physical Bitcoin (BTCE) investment fund, affect the price of the cryptocurrency asset. His research comes at a critical juncture as investors closely monitor events and developments that could impact BTC’s long-term prospects. Short term.
The relationship between the BTC ETF and the Bitcoin price
Introduction to Bitcoin ETFs The move marked a milestone for Bitcoin and the cryptocurrency landscape, sending the market into a major upswing. However, crypto investor Joao Widson analyzed the relationship between the products and the price of Bitcoin, pointing to recent trends and changes in the fund’s behavior.
In confirming this theme, Wedson noted that after the creation of Bitcoin ETFs, the German investment fund ETC Group Physical Bitcoin, which carries the symbol BTCE, has gradually started reducing its Bitcoin holdings. He also mentioned that the fund has historically been correlated with Bitcoin movements, which draws attention to a possible scenario in 2020.
According to the expert, in 2020, the company expanded its positions from 0 to 23,480 BTC, and at the same time, the crypto asset saw its first historical rise. summit In April 2021. Additionally, when the company’s Bitcoin holdings began to decline, the price of Bitcoin in most cases fell at the same time.
At present, the company’s reserves, which peaked at 27,980 BTC in January 2024, have been declining since then and are currently below 17,000 BTC. This simply means that the German ETC Group has been reducing its positions on a daily basis. However, despite the continued decline in holdings, the expert highlighted that compared to the previous scenario, the impact on the value of BTC has not been significant.
Furthermore, Wedson, including a 30-day variance study, reported that while negative divergences are typically associated with local declines and price declines, positive divergences are associated with price increases. Bitcoin“The exception is the recent move, where the price of Bitcoin rose while the fund continued to liquidate its positions and has been doing so ever since,” he added.
As investors explore Bitcoin volatility, Wedson stressed the need to monitor the development of the fund and the impact of these changes on the Bitcoin price to gain a deeper understanding of new market connections and patterns.
Bitcoin’s widespread adoption amid market uncertainty
While retail investors were selling, Bitcoin For Freedom, a cryptocurrency enthusiast, Cited Increase in institutional adoption of BTC.
According to enthusiasts, as the general public sold, spot ETFs captured over a million BitcoinMichael Dell discusses Bitcoin, Goldman Sachs holds $500 million in Bitcoin, BlackRock ETF buys over 5,000 Bitcoin in 5-day period, among other things.
Featured image by iStock, chart by Tradingview.com