Bitcoin’s value dropped more than 10% two days following the approval of a Bitcoin exchange-traded fund (ETF) in a decline that potentially validates the bear theory that a sell-the-news-style event would happen soon after the ETF’s sanction. Prior to the initial trading of the ETF on January 11, Bitcoin’s value had experienced a 75% hike over 90 days, which could somewhat account for the subsequent drop to $42,500.

The recent dip raised concerns among traders regarding the possibility of a bearish stance among investors, especially following several unsuccessful attempts to breach the $47,000 ceiling in the week prior. There’s speculation that market makers and whales who had started buying before the ETF’s launch might be forced to incur losses. Additionally, with Bitcoin halving less than 100 days away, Bitcoin miners may also feel the need to sell some of their reserves.

Though the profitability of a Bitcoin mining operation is a factor, the halving is expected to considerably alter margins. Miners’ outflow hit a six-year high, moving $1 billion worth of BTC to exchanges. Regardless, CryptoQuant data suggest there is no sure connection between Bitcoin miners’ net flows and the short-term price of Bitcoin.

To determine if traders are indeed turning bearish on Bitcoin, it’s important to examine Bitcoin derivatives. For instance, the total futures open interest has risen by 14% to 446,500 BTC since January 5, indicating that there is still an active interest in leveraging positions.

Furthermore, it seems that the recent noise in the market hasn’t been caused by retail traders using excessive leverage, nor are these investors betting on a price drop. The put-to-call ratio data indicates a lower demand for sell options, suggesting that investors do not fear a major Bitcoin price crash.

Lack of clarity on the workings of the Spot ETF in terms of creation, redemption, and price formation perhaps contributed to the dip in Bitcoin on January 12. Misinformation including multiple false ETF approval alerts and anxiety caused by brokers denying clients the option to invest in this sector could also be contributing factors.