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Bitcoin volatility remains low, but the main cryptocurrency continues to fall. And the long-awaited moment of clarity is about to come - will the price reverse sideways from one of the support levels of 31,082.82 or 28,392.99? If so, that would be a good buy point. If not, where are we going to catch BTC/USD?
There are opinions that the current level of volatility of the main cryptocurrency and sideways dynamics are associated with the unlocking of the flagship bitcoin trust Grayscale $GBTC. Many believe that the unblocking of shares will put pressure on the spot market in the short term. At the same time, Grayscale will not sell its BTC after the expiration of the shares.
Investors buy bitcoins to deposit into the GBTC fund and receive shares against their BTC deposit. In a sense, the bitcoins held in GBTC never move, except for the 2% management fees charged by Grayscale.
The unlocking of these stocks is still bearish in the short term, as the GBTC premium turns negative during the sell period. Therefore, investors have more incentives to buy GBTC stock than to buy bitcoins at the spot price.
The GBTC premium currently stands at -11.25%, which means that after selling their shares on the spot market, traders can again buy those shares at an 11% discount. It is more profitable than buying BTC.
The GBTC premium plays a key role in the 6-month holding period. Institutional buyers hope to sell them at a higher premium than the price they were bought at. GBTC traded for most of the first quarter with a premium in a positive price range, but after April it turned negative.
Since there is currently no regulated bitcoin fund that is traded on an exchange, Grayscale crypto products have become a popular choice for investors. The asset management company also plans to convert its GBTC into a bitcoin ETF by next year.
If the next Grayscale unlock becomes a bearish factor for the cryptocurrency, it is still worth keeping an eye on the technical price action. Today the price of BTC/USD has almost reached the level of 31,082.82. Below is another strong support at 28,392.99, and only the consolidation below this level can be considered a bearish signal. In other cases, the chances of bitcoin recovery remain.
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