Bitcoin slips below $40K – Millions in longs get wiped out

• BTC positions worth $63 million were liquidated in the last 24 hours, with 80% of them being longs.
• BTC has crashed 16% since the ETF approval day.

The week started on a bloody note for the crypto market, as the industry barometer Bitcoin [BTC] slipped below $40,000 for the first time in nearly seven weeks.

Bloodbath in the market

The king coin tumbled to $39,536 at 7:45 pm UTC on the 22nd of January, AMBCrypto noticed using CoinMarketCap’s data. The price recovered to $40,063 at press time as some traders bought the dip.

However, Bitcoin’s slide caused a ripple effect on the broader market, with the total market cap falling 2.62% in the 24 hours.

The slump caused a massive dent in the portfolios of futures traders. According to Coinglass, BTC positions worth $63 million were liquidated in the last 24 hours, with 80% of them being longs.

Overall, $211 million in liquidations was observed across the entire market, with longs forming the majority of them.

Source: Coinglass

Grayscale outflows increase selling pressure

The catalyst for the bloodbath continues to be fund flows from Grayscale Bitcoin Trust, formerly Grayscale Bitcoin Trust (GBTC).

According to AMBCrypto’s analysis of CryptoQuant’s data, 14,291 Bitcoins flew out of the fund on the 22nd of January, equating to $570 million as per prevailing market prices.

Since the launch of the ETF, Grayscale’s on-chain balance has fallen by 66,000 BTCs, most of which are getting liquidated in the secondary market.

Source: CryptoQuant

The current set of developments were in contrast to the positive expectations preceding the approval of ETFs. While Bitcoin did hit a top of $48,000 on the ETF approval day, it has crashed 16% since then.

The negativity started to reflect on the social volume of top cryptos.

According to data from Santiment, there was 35% less discussion towards BTC and 21% less toward ETH compared to the week before ETFs were cleared for trading.

Source: Santiment

Read Bitcoin’s [BTC] Price Prediction 2024-25

Dormant coins make a comeback

Amidst these developments, an intriguing behavior came to light. Notably, CryptoQuant CEO Ki Young Ju drew attention to the resurgence of old Bitcoins in recent days.

This was most likely happening due to GBTC shareholders getting access to their Bitcoin after a long time and dumping them for profits.