Bitcoin continues to lose ground. On the evening of January 22, the coin immediately dropped below $40,000. We decided to find out how the market reacted to the fall of BTC and when Bitcoin could resume growth.
Why is Bitcoin Down Today?
On the evening of January 22, 2024, Bitcoin dropped to $39,450. After that, the coin entered a correction. At the time of writing, BTC is trading at $40,072. Bitcoin has been falling since January 11th. On this day, trading in spot ETFs on BTC was launched in the United States. The local maximum of Bitcoin was recorded around $49 thousand on January 11. Since then, the cryptocurrency has lost over 19% of its value, of which 5.6% occurred in the last 24 hours.
One of the reasons for the fall of Bitcoin may be a decrease in interest in the cryptocurrency amid the long-awaited launch of spot ETFs on BTC. Let us remember that members of the crypto community have been fighting for the emergence of the tool since 2013. The end of the multi-year race to launch spot Bitcoin ETFs could shift investor attention to other assets.
Also, the negative dynamics of the digital asset market is supported by negative news on inflation in the United States, which does not allow the Fed to move on to lowering the key interest rate. The changes could increase the investment attractiveness of high-risk assets such as cryptocurrency.
When will Bitcoin Go on Bull Run?
Many members of the crypto community believe that Bitcoin still has room to fall. This opinion, for example, is shared by analyst Sunnydecree. He supported the theory of blogger WhaleWire, according to which BTC is under pressure from Grayscale.
Prepare for a massive #Bitcoin dump. Get your FIAT ready to buy the dip! https://t.co/RIZvMy08QZ
— sunnydecree (@sunnydecree) January 22, 2024
The company, in his opinion, is preparing to sell a large volume of bitcoins. At the same time, sunnydecree believes that the fall in cryptocurrency should be used to buy coins at an attractive rate.
The Bitcoin forecast, according to which BTC will continue to decline, was also supported by ex-CEO of BitMEX Arthur Hayes. Crypto blogger MartyParty also joined those expecting a further fall in Bitcoin. His analysis points to the potential for BTC to decline towards $38,800.
Some members of the crypto community believe that Bitcoin has already found the bottom. For example, this point of view is shared by analyst CryptoBullet. He explained his Bitcoin forecast by closing a *gap on the Bitcoin futures chart on the CME Chicago Mercantile Exchange.
*A gap is a gap that forms on the chart between the closing and opening prices of trading. In the chart below, the gap is marked with a rectangle. Many traders believe that the price of an asset tends to “close” gaps – that is, go down to the gap levels in order to “fill them” through pro-trading. Within the framework of this theory, “closing” the gap opens the way for the asset to further growth.
The theory that Bitcoin has already found its bottom was supported by crypto blogger Crypto Rover. Analyst Michael van de Popp, in turn, believes that BTC is close to pushing off from a local minimum. Trader Marco Johanning joined the optimists. He believes that BTC will not fall below $37.8 thousand.
U.S. Securities and Exchange Commission Commissioner Hester Peirce said the lessons regulators learned in approving the Spot Bitcoin ETF “will definitely stay with us.”
In a recent interview, Peirce said the SEC “heard from the court that our approach was wrong in the sense that the regulators didn’t show the consistency that they should have shown.” SEC Chairman Gary Gensler received the court’s analysis and “reacted accordingly,” she said. Peirce declined to reveal the status of the Spot Ethereum ETF application, but expressed hope that future crypto ETF applications will not face a lengthy court or appeal process.
