Bitcoin’s downward slide continued on Monday, with its price dipping under the $40,000 threshold for the first time in 2022. This extends the recent correction Bitcoin has experienced since hitting an all-time high of nearly $69,000 in November 2021. At one point, Bitcoin plunged to $39,414, its lowest level since early December of last year, dragging the rest of the cryptocurrency market down as well.
Ethereum, the second-largest cryptocurrency after Bitcoin, also dropped significantly to $2,333, down 5% on the day. Experts say this pullback in Bitcoin should come as no surprise, calling it a “sell-the-news” event after the launch of the first US Bitcoin exchange-traded funds (ETFs) in mid-January. In the lead-up to these ETFs being approved by the Securities and Exchange Commission, investors piled into Bitcoin, anticipating the milestone would drive up prices. Now that the ETFs have begun trading, some investors are cashing out, materializing the gains they were hoping for.
While Bitcoin has sunk 14% since its peak on January 10th when the ETF news was still fresh, ether has held up relatively better, still being slightly positive for the year so far. However, chart analysts caution Bitcoin could still have further to drop before recovering, with estimates ranging from $36,000 to potentially even lower. Beyond just Bitcoin, the overall crypto market is flashing red, with major altcoins like Solana, XRP, and Uniswap’s token posting significant single-day losses between 4-7%.
After 2021’s massive crypto rally, the early stages of 2024 have proven disappointing. Some experts predict the weakness could persist for Bitcoin and others at least for the rest of the first quarter, though long-term bull cases remain. For now, the euphoria in crypto seems to have cooled considerably along with prices.
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