Bitcoin Falls Below $40,000

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Bitcoin Falls Below $40,000

Leading cryptocurrencies began the week down as investors, who are probably reducing their exposure in the wider market in expectation of lower prices, continue to be concerned about massive bitcoin (BTC) sales. Bitcoin continued its recent downward trend, dropping below $40,000 to its lowest point since early December.

The cryptocurrency’s price dropped by almost 2% at $39,362.00, reversing some of the earlier losses but continuing to climb from the day before.

Some have identified short-term selling pressure stemming from withdrawals from the Grayscale Bitcoin Trust (GBTC), which has seen outflows of approximately $2 billion since January 19, compared to inflows of more than $1 billion into BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund.

Traders have been waiting out this correction, which many saw as a “sell the news” event after the approval of bitcoin ETFs was widely anticipated. As the event’s anticipation grew in August of last year, the price of bitcoin began to rise steadily.

Traders are currently sitting on sizable unrealized profits, and analysts predict that bitcoin will drop much lower before rising again. Chart analysts have indicated that $36,000 is the support level to monitor in the near term. Nevertheless, chart analysts predict that this year will see Bitcoin reach a new all-time high.

The rest of the cryptocurrency market continued to decline due to the movement in Bitcoin. Ether decreased by 7% to $2,170.55. Together with the token associated with the decentralized finance protocol Uniswap, Solana fell 7%. Dogecoin dropped 6% and Ripple’s XRP dropped 5%.

Crypto-related stocks also experienced pressure. Long used as a stand-in for the price of Bitcoin, Microstrategy saw a 4% decline, while the two largest miners, Marathon Digital and Riot Platforms, each saw a 2% decline. Coinbase fell 4% as a result of a downgrade by JPMorgan, which raised the possibility that the cryptocurrency rally would fizzle.

Some analysts, including Bloomberg’s Eric Balchunas, have blamed sales of Grayscale’s GBTC bitcoin exchange-traded fund (ETF) for the recent downward pressure on the price of bitcoin.

Grayscale moved over $400 million worth of bitcoin to custodian Coinbase Prime on Thursday, according to verified wallets that the firm tracked and labeled. This could be a step toward an eventual sale, as previously reported.