Bitcoin’s price dips to $40K – What’s next for crypto investors?

In this post:

  • Bitcoin edged closer to falling below $40,000 on Monday as cryptocurrencies painted a sea of red amid a larger rally in traditional markets.
  • The dips contrasted sharply with positive performance elsewhere, with global shares rising on Monday and US futures pointing to another record for Wall Street. 
  • On Friday, Bloomberg Intelligence reported that spot Bitcoin ETFs in the US traded $6.5 billion in their first week, far more than traditional asset ETFs.

Recent developments have seen Bitcoin’s value experiencing fluctuations as it retraces its steps towards the $40,000 mark. This downward movement comes amidst a backdrop of heightened anticipation and speculation surrounding the market potential of a Bitcoin Exchange-Traded Fund (ETF). 

Bitcoin starts the week on a bad scale

At 7.30 a.m. on Monday in New York, the largest virtual token in the world fell as much as 3.4%, reaching a low of $40,352 — which was just below its lowest point of 2024, recorded on Friday. Other cryptoassets also declined, with Ether falling 4.1% and Dogecoin and Solana’s SOL, lesser tokens, falling 3.9% and 2.1%, respectively.

At the time of writing, the current value of Bitcoin (BTC) is $40,486.00, reflecting a 2.6% decrease since yesterday and a 0.3% increase from an hour ago. BTC is currently 4.2% less valuable than it was seven days ago. The aggregate traded volume of Bitcoin over the last twenty-four hours was $21,371,488,837. The Fear and Greed index sits at 55.

The current value of the global crypto market cap is $1.67 trillion, representing a change of -2.92% over the last twenty-four hours and 55.48% over the past year. The current market cap of Bitcoin is $797 billion, which signifies a 47.7% market share for Bitcoin. Stablecoins, meanwhile, have a market capitalization of $135 billion, or 8.07%, of the total crypto market cap.

BTC vs. traditional markets

The declines stood in stark contrast to positive performance in other markets, as global equities advanced on Monday and US futures indicated that Wall Street may set a new record. Ahead of Thursday’s release of fourth-quarter GDP data, investors remained optimistic about the resilience of the US economy, as the STOXX index in Europe gained 0.5% and Nasdaq 100 futures gained 0.7%.

According to a note published by Bloomberg Intelligence on Friday, about $6.5 billion worth of spot Bitcoin ETFs changed hands in the United States during their first week of trading. This is significantly more than the volume of shares traded in ETFs pegged to traditional assets.

Certainly, since the ETF listings, market sentiment has declined, and the declining trend in leverage usage indicates that traders are opening cautious positions.

Best understand – market correction!!

Presently, the crypto coin is perilously near the psychological threshold of $40,000, which has sparked a debate regarding the continuation of the correction.

As a collective, the crypto markets exhibited an extended upward trajectory free of significant fluctuations before the present downturn.

A great deal of the increase could be attributed to the anticipation surrounding the approval of a spot Bitcoin ETF.

The price rose from approximately $26,000 in mid-October to $48,500 in January, with hardly any price fluctuations in between. This signifies a growth of approximately 86%.

In addition, the well-known Crypto Fear & Greed Index has been indicating for quite some time that the market is overbought. The trend has been towards increasing populations for a considerable period of time. As was recently reported, it fell to Neutral for the first time in three months on January 15th.

Prior to that, it was predominantly positioned in the Greed or Extreme Greed category, which, according to multiple metrics, indicated excessively enthusiastic market participants.

It is evident that sellers have held the upper hand for the past two weeks at this rate, and many are speculating as to whether or not the bulls will return.

Although accurately forecasting potential fluctuations in Bitcoin’s price is challenging, the halving is rapidly approaching and could play another aspect in BTC’s bull rally.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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