Bitcoin traders expect a return to swing highs after BTC price hits $42,000

Traders rejoice as Bitcoin’s price hits $42,000. Here is why BTC’s price is up today.

Bitcoin’s (BTC) price has broken through $42,000 for the first time in nearly seven days as the market recovers from the aftermath of the spot Bitcoin exchange-traded fund (ETF)-linked sell-off.

Data from Cointelegraph Markets Pro and TradingView shows Bitcoin climbed rapidly from a price of $39,545 on Jan. 26 and gained 5% to trade at $41,973.

Bitcoin’s price performance comes as the market experiences a slowdown in outflows for Grayscale’s GBTC spot ETF.

Data from BitMEX Research shows GBTC saw outflows of $394.1 million on Jan. 25, down from $429.3 million on Jan. 24 and $515.3 million on Tuesday, Jan. 23.

While the GBTC outflows remain very high, the Jan. 25 figure marked the second-lowest since spot Bitcoin ETF trading debuted on Jan. 11.

Bitcoin Spot ETF Flow – Day 10

Data out for all providers

$80m net outflow for day 10 pic.twitter.com/iFa1KTOk4t

— BitMEX Research (@BitMEXResearch) January 26, 2024

Senior Bloomberg ETF analyst James Seyffart posted a chart on X showing premiums and discounts for the Bitcoin ETFs compressing over the last 10 days, to which fellow analyst Eric Balchunas responded by saying it is “a beautiful sight.”

Shrinking arbitrage bands.. a beautiful sight. The US ETF ecosystem doing its thing. https://t.co/g26kGMP4cA

— Eric Balchunas (@EricBalchunas) January 26, 2024

Independent market analyst Yakuza said that BTC has successfully set a trap for bears who were hoping to catch the price at $32,000. Yakuza added, “Late shorts already liquidated or about to.”

#Bitcoin trap successfully set.

Late shorts already liquidated or about to.

Never go against the mafia.
Obey and follow to be profitable, whatever the market condition is.$BTC https://t.co/NUuJwmkTAx pic.twitter.com/6hR3jZGlke

— Yakuza (@YakuzaInCrypto) January 26, 2024

Related: Crypto exec sees ‘mid to low’ $20K BTC price before new all-time highs

In line with Yakuza’s observation, data from CoinGlass shows short-position liquidations for Bitcoin topping $34.3 million on the day, with the tally expected to increase before the close of the day. Cross-crypto short liquidations amounted to more than $77 million.

The current market trend is a cause for optimism among crypto investors and traders, who are hoping to see Bitcoin’s price benefit from the long-term impact of spot Bitcoin ETF trading.