Prepare for Bitcoin ETF Buyers: $79K Could Be Your First Major Challenge

The cryptocurrency market has recently faced significant downturns, causing Bitcoin's price to fall below the year's beginning level. This shift has raised concerns amongst Bitcoin ETF investors, particularly as new data indicates they may soon experience substantial selling pressure.

Key Takeaways

Bitcoin's price has recently dropped significantly, sparking concerns for ETF investors.
The pain threshold for BTC ETF buyers is around $79,300.
Most capital in US ETFs is coming from retail investors rather than institutional money.
The current Bitcoin price is roughly $84,500, down over 2% in the last 24 hours and more than 11% this past week.

Current Market Overview

The cryptocurrency sector has come under intense bearish influence this past week, with Bitcoin falling below its opening price for the year. Concurrently, other major assets have suffered, recording substantial double-digit losses. Discussions about the traditional four-year cycle's demise and the transformation of Bitcoin’s market structure have gained traction. This includes the anticipation that spot exchange-traded funds (ETFs) would offer consistent liquidity. Nevertheless, recent on-chain data suggests that BTC ETF investors may soon face challenges.

The $79,300 Threshold for BTC ETF Buyers

According to a recent analysis posted by IT Tech on the CryptoQuant platform, an examination of current Bitcoin market dynamics suggests that BTC ETF buyers are on the cusp of significant pressure. This comes as they may encounter their first considerable test with Bitcoin currently fluctuating around the $79,300 mark.

The Bitcoin US ETF Realized Price is a critical metric here, tracking the average purchase price of BTC held by exchange-traded funds in the United States. This indicator reveals insights into how both institutional investors and regular holders of Bitcoin are faring in terms of profitability.

However, IT Tech outlined an intriguing perspective, contesting the belief that the funds flowing into ETFs are largely "Institutional Money." The analyst pointed out that most of the gains attributed to U.S.-based ETFs primarily come from retail investors acquiring Bitcoin through their brokerage accounts.

Bitcoin Source: CryptoQuant

As depicted in the chart, the current Bitcoin US Exchange-Traded Funds Realized Price hovers around $79,300. IT Tech suggests that ETF buyers typically feel a sense of confidence when trading above this realized price, while they tend to panic—much like most retail investors—when trading below their entry point.

On-chain analysts suggest that many ETF investors lack experience with price declines in Bitcoin. Therefore, this group of exchange-traded fund holders, or “new retail” investors, who haven't faced adverse market conditions before, might resort to panic selling if they find themselves at a loss.

At present, Bitcoin's next significant support level is seen around $82,000, where many spot investors have settled their cost basis. Thus, $79,300 emerges as a crucial price point to monitor, especially if Bitcoin's price experiences additional declines.

A Snapshot of Bitcoin Prices

As of the latest updates, Bitcoin's price is approximately $84,500, marking a decline of over 2% within the past 24 hours. Data from CoinGecko indicates that the flagship cryptocurrency has dropped more than 11% over the past week.

Bitcoin Bitcoin price on the daily timeline | Source: BTCUSDT chart on TradingView