Last week, prices for BlackRock’s spot bitcoin (BTC) exchange-traded fund (ETF) experienced a substantial decline of over 11%, with trading volumes reaching their highest levels since mid-November, as reported by data source TradingView.
In a remarkable shift, over 331 million shares of the ETF, trading under the IBIT ticker on Nasdaq, changed hands as the fund’s price dropped below the crucial January support level of $50.69, ultimately falling to $46.07, marking its lowest price since early November.
This price movement may be disappointing for bullish investors. A fundamental principle in market analysis is that price movements must be validated by trading volume. Simply put, bearish price action gains credibility when accompanied by a significant increase in the number of shares or contracts traded on the exchange.
Moreover, data from Farside Investors indicates that investors withdrew more than $1 billion from the ETF amid the price decline and the decreasing CME futures basis—a factor indicative of the return on carry trades—resulting in a wave of panic selling. This downward trend was not isolated, as other ten U.S.-listed ETFs also experienced significant outflows.
Despite the recent setbacks, IBIT continues to hold its status as the largest ETF in the world, boasting $39.6 billion in assets under management, reflecting the enduring interest in this financial instrument.
Trading volume showed significant activity last Tuesday as IBIT breached the horizontal support at $50.69, signaling potential further losses ahead.
The current technical outlook remains bearish as prices continue to hold below the previous support level now acting as resistance. Investors and analysts alike will be closely monitoring these developments, as the situation evolves in the dynamic world of bitcoin ETFs.
