BTC price recovers from $40.3K lows with Bitcoin volumes ‘decimated’

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Bitcoin (BTC) edged closer to $42,000 into the Jan. 21 weekly close with time almost up on a grim week for bulls.

BTC/USD 1-hour chart. Source: TradingView

BTC price awaits fresh cues

Data from Cointelegraph Markets Pro and TradingView showed BTC price action stabilizing above $41,000 over the weekend. The pair had previously dipped to $40,270 on Bitstamp — its lowest since Dec. 11.

While not delivering major downside, Bitcoin offered little hope to those seeking new highs, with market participants looking ahead to the weekly close and return of Wall Street trading.

“Bitcoin has indeed dropped into the Weekly Range Low after flipping black into new resistance,” popular trader and analyst Rekt Capital warned on X (formerly Twitter).

“Weekly Close below the Range Low would be bearish and could begin the breakdown process.”

Fellow trader Crypto Tony maintained the possibility of a trip below $40,000 to come between now and April’s block subsidy halving.

Joe McCann, founder of crypto fund Asymmetric, meanwhile noted just how little trading volume Bitcoin was now seeing.

“Bitcoin vols have been absolutely decimated post ETF launch (as expected),” he told X subscribers alongside data from derivatives exchange Deribit.

“The spread between implied and realized vol is the widest it’s been in a very long time.”

BTC 1-week implied volatility vs. realized volatility. Source: Joe McCann/X

“All eyes on” GBTC sales

The United States’ spot Bitcoin exchange-traded funds (ETFs) continued to be a source of particular interest.

Related: Ethereum looks to end 18-month losing streak vs. Bitcoin

As Cointelegraph reported, these increased their assets under management to nearly $4 billion since their Jan. 11 launch, helping reduce the impact of selling from the Grayscale Bitcoin Trust (GBTC).

The latter, itself now an ETF, saw outflows as a result of both high maintenance fees and a desire for existing investors to cash out at par versus spot. Previously, GBTC shares traded at up to a 48% discount versus BTC/USD.

GBTC saw outflows of $1.17b since its conversion from a Trust to an ETF,” trading firm QCP Capital wrote in its latest market update on Jan. 17.

“This is not surprising since GBTC has traded at a discount since 2020 (as low as -48% at the start of 2023). This ETF conversion has been a long awaited chance for GBTC holders to exit at par value. The question is how much more of GBTC’s current $25.4b AUM will exit.”

QCP added that “all eyes” were on GBTC outflows going forward.

“The next major crypto events are BTC halving (mid-Apr), and potential ETH Spot ETF approvals from May. In the meantime, crypto might take some direction from macroeconomic events,” it predicted.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.