Decline in BlackRock’s Spot Bitcoin ETF Prices
Last week, BlackRock’s spot bitcoin (BTC) exchange-traded fund (ETF) experienced a significant decline, with prices plummeting over 11%. This downturn was accompanied by trading volumes that reached their highest levels since mid-November, as reported by the data source TradingView. A staggering 331 million shares of the ETF, which operates under the ticker symbol IBIT on Nasdaq, exchanged hands during this period. The fund’s price fell below the crucial January support level of $50.69, ultimately settling at $46.07, marking its lowest point since early November.
This development may come as a disappointment to bullish investors. For decades, a fundamental principle in market trading has been that price movements should be validated by corresponding trading volume. In essence, bearish price movements are often deemed more significant when they are accompanied by a notable increase in the number of shares or contracts traded.
Furthermore, data from Farside Investors indicates that investors withdrew over $1 billion from the ETF, driven by the price decline and a diminishing CME futures basis, which reflects the returns on carry trades. This scenario resulted in widespread panic selling, affecting numerous other U.S.-listed ETFs, which also suffered losses.
Despite these challenges, IBIT retains its status as the largest ETF globally, boasting $39.6 billion in assets under management. The technical charts for IBIT, both weekly and daily, reveal that trading volume surged last Tuesday as the fund broke through the horizontal support level at $50.69, signaling potential further losses ahead.
As it stands, the technical outlook for IBIT remains bearish while prices continue to linger below the former support level, which has now turned into a resistance point.
