Bitcoin price has suffered a steep fall. As of press time, the largest cryptocurrency by market capitalisation is trading at around $38,940, marking its lowest point this month and a $10,000 drop from its January peak, per Coinmarketcap data. In the past seven days, the flagship digital asset has experienced a three-day consecutive drop, marking its lengthiest losing streak since mid-December. As expected, smaller cryptocurrencies, including Ether, Solana, have also recorded varying levels of declines.
It is no longer news that despite the approval of the much anticipated Bitcoin Exchange Traded Fund (ETF) in the United States, the crypto market has remained largely in the range zone. In fact, it is showing more bearish signals than the other way around.
Recall that we reported on Monday how Bitcoin has faced a significant decline despite the approval of Bitcoin Spot ETFs in the US. Also, we predicted that the flagship digital asset was headed below the $40,000 threshold.
Read here:
Bitcoin price could fall below $40k despite ETF approval; here’s what to expect this week
No denying the fact that the approval marked a notable shift from the optimism in the crypto industry following the SEC’s decision. As a background, Bitcoin ETFs were hailed as a simpler avenue for ordinary investors to enter the Bitcoin market, sparking high expectations for BTC’s value.
However, the excitement surrounding the launch of new US spot exchange-traded funds for the leading digital asset has diminished, resulting in Bitcoin’s poorest performance in about a month.
Macroeconomic conditions affecting Bitcoin price
On the day the spot BTC ETFs debuted on US exchanges, Bitcoin surged past $49,000 for the first time since 2022. However, its ascent was short-lived, and it soon dropped, hovering around and below the $43,000 support level. The following week saw Bitcoin engaged in sideways trading, displaying a loss of its previous bullish momentum.
Reports have indicated that the challenging macroeconomic conditions, characterised by rising interest rates and a strengthening dollar, have contributed to Bitcoin’s recent struggles.
Read also:
CBN lifting the crypto ban and what it means for Nigerian crypto users
Also, data indicates that investors have offloaded over $2 billion worth of Grayscale Bitcoin Trust (GBTC) since its conversion into an ETF around January 10.
Additionally, the Bitcoin ETF approval has proven to be a sell-the-news event, as there are more sellers than buyers in the market.
However, there should be some stability in the market soon as more investors continue to flock in. Traditional financial firms tied to Bitcoin ETFs have reduced fees to attract investments. Invesco and WisdomTree cut fees by over 60%, responding to the influx of new exchange-traded funds available to US investors, per reports.
Analysts project that the market bottom is in, and the market should witness a rebound as expectations for the April Bitcoin Halving mount.
Technext Newsletter
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!
