Bitcoin has been moving sideways as the rest of the crypto market, especially Ethereum and the DeFi sector, show strength. The first cryptocurrency by market cap needs to make a decisive move to break out of its current range but could face downside in the short term, some recent reports claim.
Banking giant JP Morgan released a report written by its strategists Nikolaos Panigirtzoglou on the alleged bearish signals caused by the coming Grayscale Bitcoin Trust (GBTC) shares unlocking. The analyst expects this event to be a headwind for Bitcoin during July.
This investment product allows its holders to sell their GBTC shares only after a 6-month lockdown period. Panigirtzoglou expects investors to liquidate their shares worth around 140,000 BTC worth of shares. Thus, they will create selling pressure in an already weaken BTC’s price.
one thing we haven’t discussed yet – the grayscale $GBTC unlock schedule is looking really crusty
from mid-april to mid-june, 139,000 bitcoin worth of shares have unlocked. there’s another 140,000 bitcoin worth of shares that will unlock through the end of july
— Meltem Demir◎rs (@Melt_Dem) June 23, 2021
This bearish theory has been gaining momentum and raised concerns amongst investors and traders. Alex Mashinsky CEO at Celsius Network shares this vision and predicts BTC’s price to drop in the coming weeks.
This will be the third and final capitulation event, according to Mashinsky, before Bitcoin resumes its rally towards $100,000 by the end of 2021. The unlocking is due by around mid-July. During this period, the GBTC discount will increase to 25%, Mashinsky said.
Later, he predicts that some hedge funds will want to leverage the arbitrage opportunity between Bitcoin’s price in the spot market and the GBTC discount. Thus, they could short BTC and purchase GBTC with a higher discount.
At least $5B will have to be…