Bitcoin slips back toward $40,000 mark as ETF excitement simmers down- QHN

By Emily Nicolle

Bitcoin slipped closer to dipping below the $40,000 mark on Monday, as cryptocurrencies painted a sea of red despite a broader rally in traditional markets. 
 

The world’s largest virtual token declined as much as 3.4% by 7.30 a.m. in New York on Monday, hitting a low of $40,352 — just shy of its lowest point of 2024 recorded on Friday. Other cryptoassets were also in the red, with Ether down 4.1% and smaller tokens Solana’s SOL and Dogecoin down 3.9% and 2.1% respectively. 

The declines were in stark contrast to positive performance elsewhere, with global equities advancing on Monday and US futures pointing to another record for Wall Street. Europe’s STOXX index rose 0.5% while Nasdaq 100 futures traded up 0.7%, as investors remained optimistic about the US economy’s resilience ahead of fourth-quarter GDP data on Thursday.

 

“We are seeing weakness across all digital assets, as new ETF inflows have so far failed to offset profit-taking by speculative traders on positions put on prior to the announcement,” said Caroline Mauron, chef executive of digital-asset derivatives liquidity provider Orbit Markets. “While $40,000 might be an important psychological level, we don’t expect a break through to trigger a cascade of liquidation here, and see the next support level around $38,000.”

The first week of trading for spot Bitcoin ETFs in the US saw about $6.5 billion in shares change hands, according to a Bloomberg Intelligence note on Friday, much higher than recorded in ETFs pegged to traditional assets. 

“Market sentiment has slowed down after the ETF listings for certain, and the use of leverage continues to trend lower indicating cautious positions being opened by traders,” Fadi Aboualfa, head of research at Copper Technologies Ltd., said in an email.
“Things are shaping up to be very interesting.”

First Published: Jan 22 2024 | 7:14 PM IST