Grayscale Could Trigger the Next Stage of Bitcoin Price Rally Tomorrow
Bitcoin (BTC) continues to remain range bound for the past two weeks, but the scenario may change in the days ahead. As per data provided by on-chain analytics resource CryptoQuant, the price premium of Grayscale Bitcoin Trust (GBTC) has recorded its lowest level since April 2019.
Grayscale has hogged the limelight often in 2021, usually for its stunning quantity of Bitcoin purchases and ongoing demand. However, in spite of the capital inflows, BTC/USD has not appreciated.
At the beginning of this month, the Trust’s purchase premium is roughly $6.50, a smaller value in comparison to its earlier peak of $40. A low premium has historically matched with indecisive price movement, while big premiums coincide with huge uptrends for Bitcoin.
In the final week of December, a write-up focused on technology news outlet Hackernoon detailed the scenario as being associated with uncovering of GBTC shares, which have been put through a routine lock-up.
After the GBTC shares are released, Bitcoin shows a tendency to rally as clients’ route their profits once again to Bitcoin. The cryptocurrency usually stays range bound before the aforesaid events happen.
Hackernoon summed up as follows:
“What’s important to know is once these higher prices and premiums are realized after an unlocking, price goes on to consolidate. This lets the premium shrink again before its next unlocking event.”
The forthcoming unlocking process is scheduled for February 3. As day progresses, expectation will rise for the continuation of Bitcoin’s rally.
“This voids enables premiums to shrink again just like the nine times before,”
The article also pointed out that it had forecast the price trend precisely during the second-half of January.
“And it’ll keep shrinking until the next unlocking. Because of this I expect price to either consolidate or sag.”
Grayscale, in the meantime, is out on expansion spree with new product offerings as institutional interest extensively shows no indications of fading away for either altcoins or Bitcoin. Earlier this week, Ethereum Trust was reopened after being shut down in December, and February 25 will witness holding the Grayscale sponsored cryptocurrency centered Bloomberg Crypto Summit.
At the end of February 1, GBTC had $21.8 billion worth assets under management. Since December 10, Ether (ETH) purchases have put on hold.