Bitcoin's Continuous Decline
Bitcoin's value has continued its downward slide, falling below the $39,000 mark amidst ongoing bearish trends. This comes after the cryptocurrency dipped below the $40,000 barrier on Monday, experiencing a 5.3% drop against the U.S. dollar in the past 24 hours.
From Boom to Gloom: Bitcoin's Value Sinks Below $39K Amidst Market Speculations
Bitcoin (BTC) has witnessed more prosperous times in terms of its market value. After surpassing the $40,000 level on January 22nd, it has now descended below $39,000. On Tuesday, the cryptocurrency hit a low point of $38,600, indicating a 5.3% decrease in just one day and a 9.8% reduction over the past week. Over a two-week period, bitcoin has depreciated by 16.8% compared to the U.S. dollar.
Speculation Surrounding Bitcoin's Price Drop
The current downturn in bitcoin's price has sparked speculation, with particular attention given to Grayscale's GBTC outflows and the impact of spot bitcoin exchange-traded funds (ETFs) as a potential "sell the news event." Simon Peters, a market analyst at Etoro, discussed the recent outflows from GBTC.
"GBTC from Grayscale still holds the largest amount of bitcoin among spot ETFs, with 53% market share. However, this was acquired during its time as an investment trust before transitioning into an ETF," Peters explained. "Since becoming an ETF, GBTC has experienced net outflows totaling 66,500 BTC (approximately $2.6 billion at current market prices), most likely due to high fees driving investors to seek lower fee alternatives."
Peters also mentioned that the approval of bitcoin spot ETFs has triggered a "sell the news" event, resulting in a 16% price decline since the ETFs went live on January 11th, with long-term holders capitalizing on profits.
In addition to the GBTC outflows, Antonio Ernesto Di Giacomo, a market analyst at xs.com, believes other factors are contributing to the situation. Di Giacomo suggests that the significant price growth of over 90% in less than a year may have triggered "massive sales" that influenced the price drop. Furthermore, the analyst pointed out that miners might also be adding to the downward pressure.
"Another contributing factor to bitcoin's recent collapse could be miners selling their bitcoins, similar to what happened a few months before the May 2020 Halving," Di Giacomo wrote. "The upcoming Halving in April 2024 is a process that reduces the rewards for mining bitcoin. In anticipation of potential changes in the asset's value, miners take advantage of favorable price opportunities to sell, which could result in an oversupply and drive the price down."
What are your thoughts on bitcoin's price dropping below the $39,000 mark? Feel free to share your opinions and insights in the comments section below.
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By: Jamie Redman
Title: Bitcoin's Value Plunges Below $39,000 as Market Pressure Intensifies
Sourced From: news.bitcoin.com/bitcoin-sinks-below-39000-as-market-pressure-intensifies/
Published Date: Tue, 23 Jan 2024 13:15:30 +0000
