SYDNEY, AUSTRALIA / January 26, 2024 / Grineopay.com, headquarters, specially for Blockonomi.
After months of anticipation, the crypto industry’s dreams came true as Bitcoin spot ETFs were finally approved for trading in the USA two weeks ago. The hype leading up to this momentous event was immense, and the eleven ETFs saw high trading volumes on their first day.
However, the initial market reaction to this long-awaited news was relatively subdued. Fast forward a week, and the crypto market has taken a downward turn, with Bitcoin seeing a 11.9% decrease in price since January 12th, currently standing at just over $40,398.
This is quite a drop from the brief spike to more than $48,000 seen immediately after the ETFs’ approval. In fact, compared to the all-time high in November 2021 ($69,044.77), this decline amounts to 41.4%.
It’s not just Bitcoin feeling the effects of the market dip – other major crypto assets such as Ethereum have also seen even more, a 10% decrease in price. The tokens of popular smart contract platforms like Solana (-6.6%), Polkadot (-8.3%), Avalanche (-7.2%) have also taken a hit, losing significant percentages in value within last 7 days as per January 26th 2024, Sydney time, 9.40 pm.
Despite the lack of any immediate trigger for this downward movement, it seems to have followed the classic “sell the news” pattern. But even this is not unusual in the stock market, as the event itself – the approval of the ETFs – was already heavily priced in after a significant price surge since October.
Now, without any major catalysts to drive the market up, many traders are questioning whether the prices had simply gone up too much too quickly. As a result, they are choosing to play it safe and take profits while they can.
Looking back at October 2021, we can see a similar hype surrounding the approval of Bitcoin futures ETFs in the USA, which also led to a price record at the time. However, this did not result in a sustained price rally, and the market eventually turned and has yet to reach those heights again.
Similarly, in December 2017, the introduction of Bitcoin futures also sparked a record high before the market took a sharp downturn and the infamous crypto winter of 2018 began.
However, it’s important not to draw conclusions from these past events as the market is influenced by numerous other factors. At the end of 2021, for example, it was the Federal Reserve’s announcement of interest rate increases that heavily impacted the crypto market. And while ETFs may not have an immediate impact on prices, their long-term effects could be significant.
“According to my team of analysts from Grineopay.com, in the coming months, the market will likely be influenced by two main factors: the Bitcoin halving expected in April and the macroeconomic landscape, with the possibility of interest rate cuts in the near future. But there is another positive sign for the future of Bitcoin ETFs – the BlackRock Bitcoin ETF has already reached a managed asset value of $1 billion, a promising indication of its potential success in the medium and long term,”
Says to Blockonomi Roman Ostapenko, the Strategic Advisor of Grineo.
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