Bitcoin Faces Pressure: GBTC Sell-Off Spurs 3% Correction, Price Hovers Near $60,000

• Bitcoin price has reached a psychological resistance that could lead to short-term correction and pave the way for altcoins to bloom before proceeding to the price discovery phase.
• Despite the notable cash inflows to the spot Bitcoin ETFs led by BlackRock, Fidelity, and Ark Invest, the GBTC outflow has significantly weighed heavily on the bullish sentiment.

Bitcoin (BTC) price closed February very close to the all-time high (ATH) the lowest point of the 2022 bear market. The flagship coin rallied against all odds on Wednesday to reach a fresh 25-month high of around $64,000.

However, Bitcoin price retraced around 5 percent on Thursday and was trading around $62,121 on Friday during the London session.

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The heightened Bitcoin volatility has triggered heightened crypto liquidations in the past few days, whereby nearly $300 million was rekt in the 24 hours leading to Friday. Nevertheless, Bitcoin bulls in the long haul are in control with the fourth halving less than 50 days from happening.

Mixed Reactions from Spot Bitcoin ETF Issuers

The past few weeks have been a roller-coaster for the Bitcoin market following the historical approval of spot Bitcoin exchange-traded funds in the United States. In the past week alone, more than 30,000 Bitcoins have been purchased by the spot Bitcoin issuers compared to the less than 7k produced by miners during the same period.

Remarkably, the OTC Bitcoin market is at the lowest level since January 2019, where most spot ETF issuers have been making purchases to avoid notable impact on exchanges. 

Notably, BlackRock’s iShares Bitcoin Trust (IBIT) registered an inflow of around $601 million on Thursday alone. Bitwise CIO Matt Hougan highlighted in a recent interview that there is too much demand and not enough supply for Bitcoin.

As Crypto News Flash reported, more wirehouses led by Morgan Stanley, Wells Fargo, and Bank of America have signaled that some of their clients can invest in spot Bitcoin ETFs.

Nevertheless, the notable daily outflows from Grayscale’s GBTC have significantly weighed down Bitcoin’s bullish outlook. Notably, Grayscale’s GBTC has dropped from more than 600k coins before the approval of spot Bitcoin ETF to around 428,000 coins at the time of this report.

JPMorgan’s Expectations on BTC Price Action

In a note to clients, JPMorgan analysts noted that Bitcoin price may fall after the halving euphoria dissipates. The JPMorgan analyst highlighted that the Bitcoin mining difficulty could be 20 percent lower than estimated after April’s halving event. Moreover, Bitcoin miners with less efficient mining rigs are expected to go offline after the halving to upgrade to the latest machines.

As a result, JPMorgan analysts believe Bitcoin price could drop as much as $42k in the coming months before the bullish outlook continues. A Bitcoin price drop could be an opportunity for the altcoin market to rally further as crypto cash rotation continues. Nonetheless, Bitcoin price could continue on a bullish outlook as the demand increases exponentially from institutional investors.