- Bitcoin faced a significant dip, briefly falling below $40,000 for the first time in 2024, amid its ongoing correction phase triggered by the launch of spot bitcoin exchange-traded funds in the U.S.
- The cryptocurrency market, including Ether, also experienced losses, leading analysts to speculate on the extent of the correction and its impact on the broader market in the coming months.
Bitcoin, the pioneer of cryptocurrencies, experienced a turbulent start to the year as it briefly dropped below the $40,000 mark on Monday, sending shockwaves throughout the crypto market.
Navigating the Correction Phase Amidst ETF Launches
The cryptocurrency giant, Bitcoin, saw a 3.9% dip, reaching $40,052.76, with an earlier low of $39,414.80, marking its lowest level since December 3. Ether, the second-largest cryptocurrency, also faced a 5% decline, settling at $2,333.00.
This downward spiral is attributed to Bitcoin’s ongoing correction phase, triggered by the recent launch of several spot Bitcoin exchange-traded funds (ETFs) in the United States. In anticipation of the approval from the U.S. Securities and Exchange Commission (SEC), investors had been accumulating Bitcoin for months.
CEO and Chief Investment Officer at Defiance ETFs, Sylvia Jablonski, commented on the situation, stating, “Today’s Bitcoin move is wholly expected. It looks like a ‘sell-the-news’ pullback, before we see the cryptocurrency recapturing its bullish trajectory.”
Bitcoin has witnessed a 14% decline since January 10, the day when the SEC granted approval for the spot Bitcoin ETFs. In contrast, Ether, which has been outperforming Bitcoin, managed to maintain a 3% increase during the same period.
Despite assurances of the long-term uptrend remaining intact, chart analysts are cautioning investors about potential further declines. Katie Stockton from Fairlead Strategies warned on CNBC’s “Squawk Box” that Bitcoin could potentially dip to as low as $36,000, emphasizing that this downturn might be temporary. Rob Ginsberg of Wolfe echoed this sentiment, suggesting that this could be the beginning of a challenging first quarter for the cryptocurrency.
As Bitcoin experiences this market correction, it prompts reflection on the broader landscape of digital currencies. Investors and enthusiasts are closely monitoring the situation, anticipating whether Bitcoin will swiftly rebound or if the correction will persist, shaping the trajectory of the cryptocurrency market in the months ahead.
