The Block: Bitcoin Short Liquidations Reach $40 Million as Price Surges
The recent upward price movement of bitcoin has led to a significant amount of short liquidations in the cryptocurrency market. Over the past 24 hours, there have been approximately $164 million in liquidations, with around $105 million coming from short positions. Bitcoin shorts accounted for nearly $40 million of these liquidations, according to data from Coinglass.
Bitcoinโs price broke above the $67,000 mark and increased by over 2% in the past day. At 8:56 a.m. ET, it was trading at $67,087, according to The Blockโs Price Page.
Has Grayscale Exhausted One Point of Sell Pressure?
Spot bitcoin ETF net outflows were observed last week for the first time in two months. These outflows were primarily concentrated around the Grayscale Bitcoin Trust (GBTC). According to The Blockโs Data Dashboard, GBTC outflows totaled over $2 billion last week, marking a 58% increase from the previous weekโs outflows of $1.26 billion. Analysts at Coinbase believe that selling activity on GBTC may have contributed to this rise in net outflows.
A recent report by Coinbase suggests that Genesis Global Holdco LLCโs potential sale of 35.9 million GBTC shares, valued at approximately $2 billion, could have been a factor in last weekโs selling pressure on GBTC. Genesis received permission from the U.S. Bankruptcy Court for the Southern District of New York to sell its GBTC shares on February 14. However, it is uncertain whether the recent outflows are directly linked to these sales due to the lack of public filings announcing them immediately.
Coinbase analysts state that if these specific GBTC sales have been completed, the macro environment is favorable for more spot bitcoin ETF inflows following the recent U.S. Federal Reserve meeting.
GBTC Outflows Likely Due to Genesis
Bloomberg Senior ETF Analyst Eric Balchunas suggests that the notable GBTC outflows seen last week were likely due to Genesis. Balchunas tweeted, โThe nine new Bitcoin ETFs have taken in about $1.2 billion in the past 5 days as price declined 8%.โ He further explained that GBTC had outflows because Genesis was exchanging GBTC shares for spot BTC, resulting in a net neutral event. Additionally, Balchunas noted that the ETFs have been net buyers of BTC, and none of the new money has left; in fact, more has come in.
Hot Take: Bitcoin Shorts Liquidated as Price Surges ๐
The recent surge in bitcoinโs price has caused significant liquidations of short positions. In the past 24 hours, nearly $40 million worth of bitcoin shorts were liquidated, contributing to the total liquidation amount of over $164 million. As bitcoin broke above the $67,000 mark and increased by over 2%, traders with short positions faced losses.
This surge in price may indicate a bullish sentiment in the market, with potential inflows into spot bitcoin ETFs. However, it is important to monitor any developments related to selling pressure from entities like Grayscale and Genesis that could impact market dynamics.
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