Many would say that a "sell the news" event post-bitcoin ETFs approval was to be expected - and maybe it was -, but the amplitude is a bit interesting.
Let's say some big players were set to take profits right after the approval, which would make sense. But at the same time, were floods of fiat anxiously waiting to buy in? Maybe not floods, but they are slowly coming in.
At the same time, it looks like most ETFs played right the discounted or delayed fee war, and one big player clearly lost this game so far. The ones with a temporary discount understood well the investors' psychology, and that they will be attracted by the lower fees, even if they may rise in the future. Grayscale thought its investors wouldn't flee because of the high fee they had set, because that would trigger a taxable event. Looks like they were mostly wrong. Once it was clear a selloff had started, many of its investors would have now two reasons to leave them: one, to take profit, and two, to avoid the much higher management fee. Yes, that's a taxable event, but maybe they'll find other ways to compensate and still pay less taxes. Rich people often do.
Overall, more funds were pushed into the bitcoin ETFs during the first days after the approval than were taken out of GBTC, Grayscale's Bitcoin Trust.
And yet, the price of bitcoin went down, which means other big players were selling too. The problem is I believe GBTC will continue to bleed out - unless they change something - and still has plenty of bitcoin. I suspect some of the funds taken out of GBTC will be distributed to other ETFs, but we'll have to see. Either way, that means selling pressure on bitcoin from Grayscale, and buying pressure (so far) from the rest of the bitcoin ETFs.
Here's something else we should take into account. Up to 30% pullbacks on bitcoin during bull markets are common. Higher than that, not so common. That's why I am curious if bitcoin finds a strong support around 37-38k, or breaches it to lower levels.
If the hemorrhage from Grayscale continues on high volumes this week, we might see a 35k, maybe. But if that happens, I believe it will be short-lived, because buyers will start to kick in more aggressively.
Anyway, the market is what it is these days. It doesn't help that Grayscale is probably the biggest known holder of bitcoin, outside Satoshi Nakamoto and Binance, and is bleeding (forced to sell due to withdrawals). And there is that saying: when bitcoin sneezes, alts catch a cold. I don't like it, but it is kind of proven over time to be true.
Personally, I'm hoping for this support to hold at 37-38k. But we will see...