bitcoin has technology/bitcoin-down-20-post-etf-highs-2024-01-23/” target=”_blank” rel=”nofollow”>fell more than 20% from its three-year high reached shortly after the US Securities and Exchange Commission (SEC) approved the first spot bitcoin exchange-traded funds (ETFs) in January. Analysts cite a combination of profit-taking after the highly anticipated event and broader market uncertainty as reasons for the correction.
bitcoin pulls back after ETF approval surge
The price surge in anticipation of the ETF approval saw bitcoin hit nearly $49,000 on January 11. However, since ETFs were given the green light, the cryptocurrency has steadily retreated. trading at around $39,500 at the time of writing.
According to some analysts, they have seen a classic “selling the news” scenario play out. Investors had largely valued the ETFs approval for months, and once it actually happened, some took advantage of the opportunity to secure profits, they added.
While nearly $4 billion has flowed into new spot ETFs, a significant portion, analysts note, came from existing funds like Grayscale, which converted to an ETF, suggesting less net new investment than might be possible. involve the main figures. Additionally, the ongoing liquidation of assets from the bankrupt FTX crypto exchange has added downward pressure on prices.
bitcoin slightly above the $40K level today. Chart: TradingView.com
Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank, said:
“It seems that the seemingly large number of daily outflows of GBTC is affecting the market psychologically.”
Slowdown extends beyond bitcoin, with others Major cryptocurrencies are also experiencing losses. Ether, the world's second-largest cryptocurrency, has fallen almost 4%, while Solana and other altcoins have seen similar drops. Price declines have also hit cryptocurrency-related stocks, with Coinbase shares falling about 4% in premarket trading.
Top 10 cryptos drenched in red today. Source: Coingecko
Despite the recent price correction, analysts remain divided over bitcoin's near-term prospects. Some believe that the pullback may be coming to an end, and support levels around $36,000 are likely to hold. Others believe further declines are possible before a sustained rally.
btc price action in the last week. Source: bitcoin" target="_blank" rel="nofollow">Coingecko
bitcoin: Volatility persists, long-term outlook strong
bitcoin has seen significant corrections following major news events in the past. However, long-term fundamentals remain strong and many believe bitcoin is still on track to hit a new all-time high in 2024.
Recent market volatility highlights the risks involved in investing in bitcoin and other cryptocurrencies. While there is the potential for high returns, investors should be aware of significant price swings and uncertain regulatory landscape before entering the market.
As the post-ETF fallout unfolds, the cryptocurrency market finds itself engulfed in a sea of red. Volatility underlines the sensitivity of digital assets to market sentiment and regulatory developments.
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