Bitcoin Plunges to 6-Week Low below $40K: What’s Next?

In a surprising turn of events, the price of Bitcoin has dropped below $40,000 for the first time since December 3, 2023. This decline has been attributed to the selling of BTC at Coinbase that is linked to GBTC (Grayscale Bitcoin Trust). Investor sentiment in the crypto market has been negatively affected by this development. Bitcoin’s value fell rapidly from $41,553 on January 22, experiencing a drop of more than 4.3% in the past 24 hours and 9.3% in the last 30 days. The cryptocurrency reached a six-week low of $39,450.

The market crash is being blamed on the unexpected approval of 11 spot Bitcoin ETF products by the Securities and Exchange Commission in the United States. Grayscale, a major player in the crypto industry, deposited over $600 million worth of BTC on Coinbase on January 22, bringing the total to over $2 billion. Additionally, FTX, a bankruptcy management firm, sold its entire 22 million shareholding of GBTC, equivalent to almost $1 billion. These actions have added to the downward pressure on Bitcoin’s price.

It is worth noting that the last time Bitcoin traded below $40,000 was nearly one and a half months ago on December 3, 2023. However, the cryptocurrency reached a high of around $49,000 on January 11 before this recent decline. Trader and analyst Seth expressed his desire to see Bitcoin produce a “daily close above 40K!” for a positive outcome. Unfortunately, the data shows significant long-position liquidations for Bitcoin, with over $56 million liquidated on the day, and cross-crypto long liquidations totaling more than $208.7 million.

As of now, Bitcoin has made a slight recovery and is trading at $40,245. However, the market remains volatile, and investors are advised to stay informed and cautious. By subscribing to real-time trade alerts, you can stay updated on the latest developments in the cryptocurrency market.