Traders often consider round numbers as crucial support or resistance levels in trading. Currently, bitcoin (BTC) is hovering around the $60,000 mark, which could potentially hold significance.
Markus Thielen, the founder of 10x Research, has highlighted the importance of the $60,000 level for bitcoin. He suggests that this level is critical as it aligns with the average entry price of bitcoin exchange-traded funds (ETFs), estimated to be between $60,000 to $61,000. A retest of this level might trigger a wave of liquidations in the market.
Since the introduction of 11 U.S. spot bitcoin ETFs on January 11, these funds have attracted over $14 billion in net inflows, according to Farside Investors. Notably, about 30% of these inflows are attributed to a non-directional arbitrage strategy known as the basis trade, rather than outright bullish positions.
Following bitcoin’s dip below $60,000 in late April, which saw the price bottom out around $56,500, there was speculation about the involvement of heavyweight institutional investors such as sovereign wealth funds and pension funds in the spot ETFs. However, recent data from JPMorgan indicates that 80% of the inflows into the spot ETFs actually came from existing participants in the crypto market, suggesting a strong retail presence.
Bitcoin has experienced a decline of nearly 14% over the past four weeks, driven by increased selling pressure from miners and long-term holders, Germany’s decision to divest its crypto holdings, and concerns regarding potential selling pressure from the reimbursement process related to the defunct exchange Mt. Gox.
Currently, bitcoin is trading at around $60,200, with a 4% drop in the last 24 hours. Earlier today, the price briefly dipped below the $60,000 level, indicating a critical zone that traders are closely monitoring.