In a sharp downturn, the price of Bitcoin (BTC) plunged below the $40,000 mark, marking its lowest point since December. The broader cryptocurrency market experienced a substantial downturn during this period.
The decline began after the initiation of trading for spot Bitcoin ETFs in the United States on January 11, propelling Bitcoin briefly above $49,000. However, the surge proved transient, and Bitcoin’s value swiftly retreated, ultimately breaching the psychological threshold of $40,000.
During European trading hours on Tuesday, Bitcoin experienced a substantial drop, sinking below $39,000. This downturn effectively erased nearly all gains made over the preceding two months, a trend driven by market anticipation of spot exchange-traded fund (ETF) approvals in the United States.
Within the last 24 hours, Bitcoin recorded a descent of more than 5%, hitting a low of $38,600 before a marginal recovery. As of the latest update, the cryptocurrency was down 4.69% in the past 24 hours, settling at $38,927.
Arkham Intelligence reported a significant surge in long liquidations, exceeding $100 million within a single hour, signaling a bearish sentiment pervading the cryptocurrency market.
Prominent Bitcoin critic, economist, and gold advocate, Peter Schiff, expressed his astonishment at Bitcoin’s descent, stating in a tweet, “I’m surprised it’s still this high, as the decline has been surprisingly orderly.” Schiff, who had earlier predicted the Bitcoin ETF approval as a “buy the rumor, sell the news event,” underscored his concerns in a January 2 tweet, warning about the potential negative impact of Bitcoin ETFs on BTC prices.
In the face of Schiff’s historical skepticism towards Bitcoin and his recurring predictions of its demise, analysts approach his comments with a degree of caution. Some analysts suggest that the introduction of spot Bitcoin ETFs in the United States, while widely anticipated, might have been already factored into the market pricing, possibly marking a short-to-midterm peak for BTC prices according to industry experts.
