The recent drop in the price of Bitcoin bears some resemblance to its behavior following the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States earlier this year. One trader suggests that this could lead to an upswing in the coming week or so.
Hong Kong recently launched spot Bitcoin ETFs on April 30, attracting approximately $217 million in net inflows since then. However, the price of Bitcoin has fallen by nearly 7% since the launch, according to data from CoinMarketCap.
Quinten Francois, co-founder of WhereAt Social and a crypto trader, points out similarities between this behavior and the launch of spot Bitcoin ETFs in the U.S. The launch in the U.S. saw a 14% drop in the price of Bitcoin within 12 days, followed by a 7% increase over the next seven days. If this trend continues, Francois suggests that an upswing could be expected in the next week.
“It’s important to note that there is no direct path to success. The price correction was necessary,” says a pseudonymous crypto trader known as StockLizard.
However, there are notable differences between the two launches. While Hong Kong’s Bitcoin ETFs have seen $217 million in net inflows, U.S. ETFs experienced $794 million in outflows during the same period. Additionally, Hong Kong’s ETFs only accumulated $12.4 million in trading volume on their first day, in stark contrast to the $4.6 billion first-day trading volume of U.S. spot Bitcoin ETFs.
The launch of Hong Kong’s ETFs also coincided with the Bitcoin halving event, which typically leads to a period of sideways price action. Tensions in the Middle East and the U.S. Federal Reserve maintaining high interest rates further contribute to the current market conditions.
Despite the positive net inflows from Hong Kong, some traders are concerned that it may not be enough to offset the significant outflows from the U.S., potentially preventing a similar breakout pattern.
“Hong Kong Bitcoin ETFs may not be sufficient to counterbalance the selling pressure from U.S. ETFs,” states Crypto trading team TOBTC.
On the other hand, some traders believe that the recent price decline is a healthy correction for Bitcoin’s price.
“The longer the consolidation period for Bitcoin, the higher its price will meet the trendline,” says crypto trader Titan of Crypto.
Crypto commentator CryptoCon adds, “Bitcoin’s recent correction was much needed for its future price.”
Founder of AirBtc, Handre van Heerden, emphasizes, “Bitcoin critics fail to understand that we simply don’t care if the price drops.”
Please note that this article does not offer investment advice or recommendations. All investment and trading decisions involve risk, and readers should conduct their own research before making any decisions.