Bitcoin extended its decline on Monday, breaching the $40,000 mark for the first time this year and dragging down the entire cryptocurrency market in its wake.
As per Coin Metrics, the current price of BTC stands at $40,052.76, marking a 3.9% decrease. At its lowest point during the day, bitcoin reached $39,414.80, a level not seen since December 3. Concurrently, Ether also experienced a 5% drop, settling at $2,333.00.
Bitcoin is still in its correction phase following the launch of several spot bitcoin exchange-traded funds in the U.S
The ongoing correction phase for BTC traces back to the introduction of several spot bitcoin exchange-traded funds (ETFs) in the United States. In the anticipation of regulatory approval from the U.S. Securities and Exchange Commission (SEC), investors had been accumulating BTC in the preceding months.
Sylvia Jablonski, CEO and chief investment officer at Defiance ETFs, commented on the market movement, stating, “Today’s BTC move is wholly expected. It looks like a ‘sell-the-news’ pullback, before we see the cryptocurrency recapturing its bullish trajectory.” Since the SEC approval on January 10, BTC has seen a 14% decline, while Ether, which has been outperforming bitcoin, is still up 3% over the same period.
Chart analysts caution that although bitcoin’s long-term uptrend remains intact, there may be further downside. Katie Stockton from Fairlead Strategies suggested on CNBC’s “Squawk Box” that BTC could potentially dip to as low as $36,000, with the reassurance that this level wouldn’t be sustained for an extended period. Rob Ginsberg from Wolfe echoed a cautious sentiment, indicating that this could be the start of a challenging first quarter for the cryptocurrency.
The broader cryptocurrency market experienced significant declines on Monday. Solana’s SOL token witnessed a 7% loss, Ripple’s XRP fell by 4%, and the token associated with the decentralized finance (DeFi) protocol Uniswap dropped by 5%.
