The trend change in Grayscale premiums in recent days indicates that we have come to the end of the downward trend in Bitcoin prices?
Is the decline in Bitcoin according to Grayscale premiums coming to an end?
Bitcoin prices are in a downward trend as of May 8. On May 23 and May 29, Bitcoin lost the support of $ 35,000.. However, the buying pressure at this level carried the prices above the $35,000 support line.. The shoulder-head-shoulder formation in Bitcoin prices gives hope. Unless there is an external negative shock, Bitcoin may break the $40k resistance line this time next week.
Another indicator that may cause us to be optimistic is Grayscale premiums (GBTC premiums). Famous investment company Grayscale is a gateway where many corporate companies enter the Bitcoin markets.
Grayscale premiums; Grayscale refers to the situation when Bitcoin prices are higher than Bitcoin prices in the spot markets. The higher premiums somewhat reflect the capital inflow to the Grayscale Bitcoin Trust (GBTC). The decrease in Grayscale premiums is interpreted as a fund outflow from Grayscale.. With Bitocin prices in the spot markets, GBTC is decreasing differently.
Please See: Huge loss in 1 day from the popular Bitcoin investment company Grayscale!
Grayscale Bitcoin Trust funds increased by 50,000 BTC from January 2021 to February 2021. During this period, GBTC premiums were between 10%-20%.. From mid-February, GBTC premiums began to decline, but Bitcoin prices continued to rise.. In this process, Bitcoin rose from 30,000 thousand dollars to 65,000 in the spot markets.. Afterwards, GBTC premiums fell below zero.
Bitcoin prices are in a serious crisis after May 8 SNL night and May 13 Elon Musk tweet.. GBTC premiums peaked at 21.23% on May 19. In other words, institutional demand for Bitcoin has decreased considerably.. However, it is noteworthy that after May 19, GBTC premiums started to increase again.. Premium values improved by 3.8%.
If the above increase in GBTC premiums continues, we may have come to the end of Bitcoin’s downtrend in spot markets.