Bitcoin price still underwater as Grayscale moves $1.35 billion worth of BTC to Coinbase since spot ETF assent

●Bitcoin price lost the support of a bullish governing technical formation with recovery efforts failing to suffice.

●With momentum falling, BTC risks an extended fall, potentially revisiting the $40,726 support before a possible bounce.

●The delayed recovery comes amid ongoing redemptions, and Grayscale has been constantly sending BTC to Coinbase.

●A break and close above $48,000 would hint at a possible continuation rally, with investor eyes peeled on $50,000.

Bitcoin (BTC) price slipped below the confines of an ascending parallel channel, which has been the governing chart pattern since around mid-October when the cryptocurrency market turned bullish. It comes after the January 12 crash, following revelations that Grayscale Bitcoin Trust (GBTC) was dumping.

Bitcoin price suffers in the wake of GBTC redemptions

Bitcoin price remains underwater, trying to pull back into the protective confines of the ascending parallel channel by flipping its lower boundary back into support. However, the efforts have been to no avail as Grayscale GBTC redemptions weigh heavily on BTC upside potential.  

BTC/USDT 1-day chart, Source: TradingView.

In a recent post on X, Crypto Banter founder Ran Neuner said,“GBTC held $25bn+ worth of Bitcoin that has been locked up for years with no option to be sold. As soon as the redemption option opened, for the first time people are starting to exit - as they exit the Bitcoin must be sold on the market. Now they are taking a discount again!”

Indeed, the market is not selling off as altcoins are not slumping, but there remains a whiff of stagnation in the industry as GBTC holders take advantage of cash creates to redeem their holdings. For this reason, the GBTC redemptions have made the spot BTC ETF a “sell-the-news” event.

Grayscale moves loads of BTC to Coinbase

Meanwhile, market observers and on-chain detectives have revealed that Grayscale has been moving millions of Bitcoin to Coinbase, a move often interpreted as an intention to sell. In the latest, data from on-chain analytics platform Arkham Intelligence shows that Grayscale Bitcoin Trust has moved yet another load of Bitcoin worth $200.61 million to the US-based crypto exchange, barely 24 hours after transferring $370 million BTC.

Web3 data analysis tool Lookonchain has reinforced the findings, showing that Grayscale Bitcoin Trust wallets deposited 18,638 BTC tokens to Coinbase Prime worth approximately $795 million.  Since spot BTC ETFs started trading on January 11, the asset management firm has moved a total of 31,638 BTC worth $1.35 billion to Coinbase Prime.

The transfers took place during the opening hours of the US stock market (exactly US market open 9:30am) for three consecutive trading days. The transactions have now become what seems to be a pattern of Grayscale redemptions to Coinbase Prime just before the market opens.

Renowned economist, Peter Schiff, has corroborated the turnout, saying, "The reason that investor buying of the new Bitcoin ETFs is not pushing up the price of Bitcoin is that the outflows from GBTC exceed the combined inflows into all of the other 10 Bitcoin ETFs." adding, "Once the initial buying is finished, I think all 11 ETFs will experience net outflows."

The series of transfers has caught the attention of CNBC Mad Money host Jim Cramer, who now says, “We have been selling forever for the trust; too early to buy back. Stay close to your bulletins!” Given his reputation as the ‘Inverse Cramer,’ his words must always be taken with a pinch of salt.

Meanwhile, reports indicate that cumulative spot Bitcoin ETF trading volumes have now surpassed the $10 billion mark, with calendars now marking the fourth day of trading.