The price of Bitcoin plunged below $41,000 on Monday as the approval of spot BTC exchange-traded funds earlier this month continues to be a “sell-the-news” event.
BTC Slumps Below $41,000
Bitcoin (BTC) is taking a nosedive — and bringing altcoins down with it.
At the time of publication, Bitcoin, the world’s biggest and oldest cryptocurrency, is trading for just over $40,558, down 2.6% in the past 24 hours and 4.8% on the week, according to data provided by CoinGecko.
BTC’s slump led to a market-wide retreat, with ether (ETH) dropping 4.0%, Solana’s SOL losing 6.2% of its value, and Ripple’s XRP enduring a 3.7% decline over the day to cost $0.5294 at the time of publication. Elsewhere, Cardano’s ADA is another big loser and has slumped by 4.8% over the last 24 hours. It is now valued at around $0.4913.
Popular dog-themed memecoin Dogecoin (DOGE) initially defied the struggles of the wider crypto market amid speculation of adoption in a forthcoming feature on Elon Musk’s X platform but has since fallen 3% over the past 24 hours.
Investors are concerned that asset manager Grayscale is dumping some of its BTC as owners of its Grayscale Bitcoin Trust (GBTC) quickly cash out from the ETF, contributing to the downward pressure on BTC. Blockchain sleuth Lookonchain observed that Grayscale has sold a whopping $2.14 billion worth of BTC in the aftermath of the historic ETF approval.
Crypto pundits have also claimed that the spot ETF approval was already priced in — indicating that BTC wasn’t going to see a parabolic rally after the green light.
Bitcoin Eyes $38,000
After the SEC approvals on Jan. 10, BTC rocketed to almost $49K before retreating to sub-$43,000. Spot Bitcoin ETFs have been touted as a much easier way for institutional and retail investors to gain exposure to the bellwether crypto, sparking wildly optimistic predictions for Bitcoin’s price. But now, a fall below $40,000 ahead of April halving seems likely.
The lack of positive catalysts in the short term could result in a Bitcoin price pullback. If bearish pressure intensifies, the next important support level would be $38,000.
Prominent CNBC host Jim Cramer thinks it is unlikely that BTC will be able to find its footing after the plunge to the $40,000 zone.
Meanwhile, cryptocurrencies might take some direction from macroeconomic signals such as U.S. central bank interest rate changes and inflation data.