Bitcoin Dips Below $39K Amidst ‘Sell-the-News’ Reaction to ETF Launch
In the last 24 hours, Bitcoin (BTC) experienced a nearly 5% decrease, marking its lowest point in two months. This downturn reflects a broader trend seen in the CoinDesk 20, a benchmark index of the top liquid tokens by market cap, which also witnessed a 7% decline.
During the European trading hours on Tuesday, Bitcoin’s value dipped below the $39,000 mark, eroding most of the gains it had accumulated over the previous two months. This recent decline coincided with the launch of spot exchange-traded funds (ETFs) in the United States, an event that had previously fueled a surge in BTC’s value.
Bitcoin’s retreat to a low of approximately $38,700 was a sharp contrast to its recent two-year peak of over $49,000. This peak was achieved in the wake of the U.S. beginning to trade spot bitcoin ETFs on January 11.
The recent sell-off in Bitcoin can be partly attributed to the FTX bankruptcy estate’s liquidation of around 22 million shares of Grayscale’s GBTC, as reported by CoinDesk. Analysis from firms like CryptoQuant anticipated this ‘sell-the-news’ phenomenon, a common occurrence in capital markets where asset prices increase leading up to a positive event, only to decline after the event transpires.
The introduction of spot bitcoin ETFs in the U.S. was a highly anticipated event, considered to be priced in by the market. According to analysts at the Japan-based crypto exchange bitBank, this introduction is “likely to be a short- to mid-term top for the price.”
Earlier in the month, analysts from 10X Research, under the leadership of Markus Thielen, predicted a decline in Bitcoin’s value to at least $38,000, based on technical analysis. CryptoQuant’s prediction sets an even lower target of $32,000.
