Bitcoin (BTC) price fell below $61,000 after the first spot Bitcoin exchange-traded fund (ETF) was launched in Hong Kong. Is there a risk that Bitcoin will fall below $60,000 in the coming days?
BTC price drops below $61,000 as Hong Kong ETF launch looms
Bitcoin fell to a weekly low of $60,543 on April 30, a day after the launch of the first spot Bitcoin ETF in Hong Kong. The world’s largest cryptocurrency is down more than 7.3% on a weekly chart and 13% on a monthly chart, according to CoinMarketCap.
The Hong Kong-based ETF saw just $12.4 million in trading volume on its first day, dwarfed by the $4.6 billion in first-day volume for the U.S. spot bitcoin ETF.
However, Eric Balchunas, senior ETF analyst at Bloomberg, said the figure is high considering the size of the Hong Kong market, equivalent to $1.6 billion in trading volume in the United States.
“You have to understand that Hong Kong is 1/168 the size of the US… That said, the launch of the Hong Kong ETF comes at a good time as the US economy slows, so the $141 million+ inflows in Hong Kong more than offset the slightly negative inflows in the US,” Balchunas wrote in an April 30 X post.
Of the $12.4 million in daily trading volume, about 14% was accounted for by Hong Kong-based spot Ethereum ETFs, with 86% of that inflow going to Bitcoin ETFs.
Bitcoin ETF news “absorbed”
Mehdi Lebbar, co-founder of Exponential.fi, an institutional-grade risk assessment platform, said the drop in Bitcoin prices following the Hong Kong ETF listing was a classic “sell on the news” event. He told Cointelegraph:
"Market participants often anticipate these events, causing prices to surge ahead of the actual news, followed by profit taking once the news becomes public. This pattern suggests short-term traders react tactically, capitalizing on the hype, and subsequently adjusting as the news is absorbed."
Weekly Bitcoin ETF net outflows remain negative in the U.S. According to Dune data, net outflows from the ten Bitcoin ETFs this week were $257 million, down from $396 million the week before.
ETFs in the United States are a big part of the Bitcoin price rally in 2024. According to research from CryptoQuant, Bitcoin ETFs accounted for around 75% of new investment in the world’s largest cryptocurrency as of Feb. 15, when its value surpassed the $50,000 mark.
Is there more downside ahead for Bitcoin?
Ben Caselin, chief marketing officer at VALR exchange, said that Bitcoin has been trending downwards over the past few weeks and could fall below the $60,000 mark. He told Cointelegraph:
“Bitcoin will certainly fall below $60,000 and will certainly encounter resistance for a few weeks, but eventually the impact of the halving will be felt, so most long-term holders of Bitcoin will view this period as an opportunity.”
Exponential.fi co-founder Lebbar said that while Bitcoin could indeed fall below the psychological $60,000 mark, it could be a good buying opportunity for long-term holders, in line with previous corrections in the post-halving rally:
“If the price of Bitcoin falls below this mark, it could drop further towards the $52,000 support level. This support level could present a significant buying opportunity, especially since long-term investors typically profit from such declines.”
Coinglass said that if the price of Bitcoin falls below $60,000, leveraged long positions worth more than $306 million cumulatively across all exchanges will be liquidated.
According to Cointelegraph, the key levels to watch will be around $60,000 and $51,000.
Matt Bell, CEO of open source software company Turbofish, said traders should keep a close eye on the key $60,000 support level this week. He wrote: "Key levels this week include psychological support such as $60,000 and resistance such as $65,000, while monitoring sentiment, institutional activity and macro factors can add context."
