Crypto: Is the market down again?

The rollout of spot Bitcoin ETFs by financial giants like BlackRock, Fidelity, Bitwise, or Ark Invest heralded a new era for crypto. Some even imagined these exceptional trackers would propel BTC to unprecedented heights. Currently, the queen of cryptocurrencies, along with numerous similar assets, appears to be in a slump. Details!

Cryptos Stalled?

In early January, precisely on January 3rd, we reported yet another drop in the cryptocurrency market as the verdict on the spot Bitcoin ETFs approached. The reason? The market sentiment was mixed: some traders feared further declines in crypto projects, others succumbed to greed, etc.

Total crypto market cap has fallen by 3.5% today, with #Bitcoin dropping below $43.6K 🔴

Are you buying, selling, or HODL-ing? pic.twitter.com/K0Tbi9mujs

— CoinGecko (@coingecko) January 12, 2024

« The total market cap of cryptocurrencies has fallen by 3.5% today, with Bitcoin dropping below $43.6K.

Are you buying, selling, or HODL-ing? »

BeInCrypto observed robust performance in the cryptocurrency market on January 11th. TOTALCAP then reached $1.81 trillion, representing a historic peak compared to the achievements of May 2022.

Yet, it plummeted in record time on the same day.

Nevertheless, analysts do not discount a cryptocurrency market recovery in the future, as long as the threshold of $1.61 trillion is not breached to the downside. This dynamic would avoid a 20% drop, thus preventing a free fall to the median line of the channel at $1.37 trillion.”

Bitcoin is Sulking

The arrival of spot Bitcoin ETFs on the traditional exchanges initially caused a surge in the BTC price to $49,048 within 24 hours. However, this euphoria was short-lived. Yesterday, on January 12th, the world’s largest cryptocurrency had already dropped by 5%, reaching its lowest level at $43,413 on the same day. That is well below the psychological threshold of $45,000 that it tried to surpass multiple times, according to Forbes.

Moreover, the liquidation of bitcoin positions worth $70 million in just 24 hours could also influence the price of bitcoin. This could lead to an increase in the supply of BTC and a decrease in demand with the rollout of contracts in the market, resulting in further spot price declines as traders lose interest in hodling.

As for Ethereum, the king of cryptocurrencies is faring very well after the approval of bitcoin trackers. ETH is fluctuating around $2,600. Several analysts, including James Seyffart, believe that Ethereum Spot ETFs will also see the light of day this year.

But why is bitcoin disappointing so much lately? Firstly, it should be noted that the ETFs and their effects were overestimated. Additionally, BTC miners have recently transferred significant amounts to various cryptocurrency exchanges.