Spot ETFs Success Doesn't Diminish Bitcoin Downside Risks, Experts Warn

• Bitcoin's Challenges Persist Despite Successful ETF Listings
• ETF Volume Data and Indicators
• Potential Risks
• Marginal Profits Not Falling Enough
• General Sentiment Among Crypto Traders

Bitcoin's Challenges Persist Despite Successful ETF Listings

Bitcoin$42,260 -0.64% (BTC) continues to face challenges that could potentially drive its prices lower in the coming days. This is despite the recent success of several U.S-listed spot exchange-traded funds (ETFs). Following the much-anticipated ETF listing last week, Bitcoin prices plunged by as much as 15%. This decline is said to be due to outflows from Grayscale's Bitcoin Trust product.

ETF Volume Data and Indicators

Data from BlackRock, Fidelity, and Bitwise show that ETF volume exceed the $500 million mark earlier this week, which is indicative of demand from regulated funds and professional traders. Additionally, Coinbase, which serves as the custodian for several ETF providers, recorded high OTC desk transfer volumes.

Potential Risks

Despite these developments, CryptoQuant, an on-chain analysis firm, warns of potential risks. In a note shared with CoinDesk, it was stated that, Several on-chain metrics and indicators still suggest the price correction may not be over or at least that a new rally is still not on the cards. The firm notes that short-term traders and large Bitcoin holders continue to sell, reflecting a risk-off attitude.

Marginal Profits Not Falling Enough

There are also concerns that unrealized profit margins have not declined enough for sellers to be discouraged. CryptoQuant was one of the few firms that took a contrarian view of the Bitcoin ETF approvals, a move that most traders expected would lead to price gains after they went live.

General Sentiment Among Crypto Traders

Crypto traders seem to agree with this sentiment, noting that any potential gains were muted as spot sales appeared to take place. Although Bitcoin's intraday range exceeded 3.5%, reaching the highs of the recent trading range triggered a methodical sell-off early on Wednesday," said Alex Kuptsikevich, FxPro senior market analyst. He also added that intraday dynamics show that methodical selling near local highs is taking place, while bounces are sharp and with less volume. This observation serves as a warning but does not necessarily indicate a verdict on the cryptocurrency bull market.

Edited by Jonathan Stoker