Bitcoin slips back toward US$40,000 as ETF hype simmers
BITCOIN slipped closer to dipping below the US$40,000 mark on Monday (Jan 22), as cryptocurrencies painted a sea of red despite a broader rally in traditional markets.
The world’s largest virtual token declined as much as 3.4 per cent by 7.30 am in New York on Monday, hitting a low of US$40,352 – just shy of its lowest point of 2024 recorded on Friday. Other crypto assets were also in the red, with Ether down 4.1 per cent, and smaller tokens Solana’s SOL and Dogecoin down 3.9 per cent and 2.1 per cent, respectively.
The declines were in stark contrast to positive performance elsewhere, with global equities advancing on Monday and US futures pointing to another record for Wall Street. Europe’s Stoxx index rose 0.5 per cent and Nasdaq 100 futures traded up 0.7 per cent, as investors remained optimistic about the US economy’s resilience ahead of fourth-quarter gross domestic product data on Thursday.
“We are seeing weakness across all digital assets, as new exchange-traded fund (ETF) inflows have so far failed to offset profit-taking by speculative traders on positions put on prior to the announcement,” said Caroline Mauron, chief executive of digital-asset derivatives liquidity provider Orbit Markets.
“While US$40,000 might be an important psychological level, we don’t expect a breakthrough to trigger a cascade of liquidation here, and see the next support level at around US$38,000,” she added.
The first week of trading for spot Bitcoin ETFs in the US saw about US$6.5 billion in shares change hands, as indicated by a Bloomberg Intelligence note on Friday, much higher than recorded in ETFs pegged to traditional assets.
“Market sentiment has slowed down after the ETF listings for certain, and the use of leverage continues to trend lower, indicating cautious positions being opened by traders,” Fadi Aboualfa, head of research at Copper Technologies, said. “Things are shaping up to be very interesting.” BLOOMBERG
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