Bitcoin price shows strength at $43K despite Coinbase, GBTC selling

Bitcoin price continues to rebound even as the spot BTC ETFs fail to meet investors’ expectations.

Bitcoin (BTC) pushed above $43,000 on Jan. 15 as the market attempted to rebound from the post-spot BTC exchange-traded fund (ETF) approval sell-off that occurred on Jan. 10. At the time of writing, the BTC price was hovering around $43,100, up 0.89% on the day.

This recovery comes after attempts to push BTC above $50,000 last week were stopped at $49,000, suggesting buyers’ inability to sustain higher levels.

Bitcoin price stalls below $44,000

Data from Cointelegraph Markets Pro and TradingView tracked a trip above $43,000 before BTC price volatility returned, sending the market down 1.05% in two hours.

The move occurred as traders attempted to shake off the effects of the sell-off that followed the approval of spot Bitcoin ETFs in the United States last week.

In an X (formerly Twitter) post, popular trader Skew noted that BTC’s spot markets broadly stalled around $43,000, with “increasing ask liquidity” above the current price.

$BTC Binance Spot
Price stalling here with increasing ask liquidity above price ($44K)

key LTF highs & 4H 200EMA ~ $43,168 pic.twitter.com/105qhKinMV

— Skew Δ (@52kskew) January 16, 2024

The ongoing recovery, Skew added, had been driven by Grayscale Bitcoin Trust (GBTC) selling, with some traders possibly buying the dip.

$BTC
Looks like everyone is trying to ride the GBTC driven price action, what could possibly go wrong lol pic.twitter.com/iw6s4Bjlhx

— Skew Δ (@52kskew) January 16, 2024

When asked about Bitcoin’s recent price action, Cointelegraph head of markets Ray Salmond said:

“From what I can see, traders see the ETF selling and have decided to open up shorts since the approval. Also, since bvol [Bitcoin options volatility] dropped in the day before the approval and options traders positioned in puts. GBTC selling at Coinbase seems to paint a bearish short-term picture for some, leading traders to go short. But as Skew points out, they eventually may get squeezed, and the uptrend toward mid-$50s continues.”

Related: Will Bitcoin keep dropping because of the ETFs?

However, considering how BTC/USD has been stuck between $41,500 and $43,000 over the last few days, analyst Mac believes Bitcoin’s next leg down could continue to $38,000:

“Retrace to $40,000 and possibly $38,000 is very possible here. Either $45,000-> $40,000 or sideways and $40,000 from here.”

BTC dominance tops out

To support Bitcoin’s reducing strength, Michaël van de Poppe, founder and CEO of trading firm MNTrading, reported that Bitcoin is continuing to lose ground against other cryptocurrencies in terms of the combined cryptocurrency market cap, posting on X on Jan. 12:

“#Bitcoin dominance peaking before the halving and potentially marking a cycle top. Altcoins are likely to outperform [in the] coming period.”

History repeating itself.#Bitcoin dominance peaking before the halving and potentially marking a cycle top.

Altcoins are likely to outperform coming period. pic.twitter.com/ox36x2M5NG

— Michaël van de Poppe (@CryptoMichNL) January 15, 2024

Bitcoin’s market dominance index has dropped from its local top of 54.56% to 49.82% in a week.

Gains by Ether (ETH) are the major reason why Bitcoin’s dominance declined, comprising 8.5%, with other altcoins posting similar gains.

This suggests that traders likely rotated capital out of Bitcoin to the altcoin market following the ETF approvals, seeing better risk-reward elsewhere, particularly with an Ether ETF now on the table.

If this happens, altcoins, led by ETH, are likely to start rallying as the market enters a much-awaited altcoin season.