Today ETFs take a break. What to expect for the price of bitcoin?

Bitcoin (BTC), with ups and downs in its price, continues on the sideways path which persists since it last reached its historical maximum in March. Today could be expected to be a day without too many surprises since it is a holiday in the United States and the ETFs are not operational.

At the time of this publication, each BTC trades for around $65,200 on major exchanges, as can be seen in the CriptoNoticias Price Calculator.

The following graph, provided by TradingView, allows you to observe the price movement of bitcoin during the last 3 months:

Bitcoin remaining at such levels of lateralization may be boring for traders and investors, but it is a good thing for bitcoin. A strong base is being consolidated that will later serve as support making it more difficult for BTC to fall from that price zone.

From January 2024, Bitcoin spot ETFs traded on US exchanges have a big influence on the price of digital currency. This information portal has reported the relationship between the purchases and sales of ETF shares and the rises and falls, respectively, of bitcoin.

This is due to how spot ETFs work. These are backed by the underlying asset (which, in this case, is bitcoin). Therefore, if there is a lot of demand, the ETF management companies (including BlackRock, Grayscale, Fidelity and others) must go to the market to buy BTC to back the funds. On the other hand, if there are capital outflows, management companies could sell the “surplus” BTC, causing an excess of supply and a consequent drop in price.

But today is a different day. Like every June 19, is celebrated in the United States on ‘Juneteenth‘ or also known as Liberation Day. Therefore, during the current trading day, exchange-traded funds will not have much impact on the BTC price. Although there are no guarantees, one could then expect a day of low volatility with relatively stable prices.

Beyond ETFs, as CriptoNoticias reported yesterday, there are two other factors that are putting downward pressure on bitcoin. One of them is the constant sale of BTC carried out by the “weaker” miners, who cannot adapt to the reduction in the reward that the most recent halving brought with it.

The other factor is related to Do Kwon, the founder of the bankrupt company Terraform Labs, which issued the TERRA and LUNA cryptocurrencies. Due to the sentences imposed on the businessman and his organization, they must pay fines in amounts greater than 4,000 million dollars (a sum greater than 65,000 BTC). If they decide to sell BTC to meet that obligation, it would exert downward pressure that would impact the price of the digital currency.

According to on-chain data analytics firm Glassnode, “volumes across all facets of the market [de bitcoin] “They are decreasing significantly as a balance is established between demand and sales forces.” Therefore, it could be expected that despite these potentially bearish factors, bitcoin would remain relatively stable.