Bitcoin loses 17% after its ETF gets approved. Why?

The market’s first cryptocurrency is losing ground despite the SEC having already approved a big hurdle that cryptocurrency investors have to overcome: ETF approval sought by several Bitcoin firms. However, the fall since the index fund was approved has not subsided while it is at its lowest level of the year. Analyzing the reasons

Bitcoin investors folded their sails after the most anticipated news: approval of a cash ETF in the history of the first cryptocurrency on the market. An event that crypto investors had been anticipating as one of the biggest shocks to value.

But in this case the factor “buy on rumors, sell on news” which is so popular among those who invest in variable and fixed income, has even intensified in the case of Bitcoin, which is usually characteristic of events. for example, halving or reducing the amount of virtual currency on the market.

Monitor Bitcoin price in real time

In fact, since last summer, particularly in August, when a US federal court forced reluctant members of the SEC, the US stock market regulator, to reconsider the decision it made when they rejected an application for a Bitcoin index fund from Grayscale Investment. , The leading cryptocurrency in terms of capitalization increased in price by 70%.

But the truth is that after setting highs on January 8, two days before the Bitcoin Spot ETF approval deadline in January of this year, at 47,035 dollars, and note the second high on the day in question, January 10 at 46 670, its value decreased exponentially, to almost 17%.having marked the year’s low yesterday at $39,086 per asset.

One of the reasons given by market experts They go through the power of the dollar as the US dollar index just marked its third straight weekly gain, primarily driven by a cross-curve rise in US bond yields, before reaching yearly highs around 103.70.

Another one is the set of benefits after the increase: with advances also approaching double digits since late December until the market ignored better news two days earlier.

Moreover, some experts point out that Investor preferences are concentrated on American indicatorsand therefore in values, especially in Big Tech, with those maximums noted as The Dow Jones index exceeded 38,000 points for the first time in history And The S&P 500, which just set its all-time high. And that traditional correlation with the Nasdaq has been broken, and there’s a parallelism that no longer exists.

There is still a good atmosphere on Wall Street, and has more appeal than Bitcoin, which is at a seven-week low despite the launch of 11 exchange-traded funds, which de facto represent biggest push for cryptocurrency acceptance among institutional investorsthe final recognition that the asset always seeks.

So far in January Bitcoin is down 7.8% in the market, compared to nearly 40% overvalued in the first month of 2023.. On average, January has revalued 9.74% since 2011, making it an intermediate month in Bitcoin’s historical rate compared to the traditional averages of November at 36% or April at 33%.

Regarding the fear and greed index, The current situation below 40,000 is marked as neutral, significantly lower than the greed level of 55 two days ago and 64, also the greed level of last week or December, when it was at 71.

In general, the global capitalization of cryptocurrencies over the past 25 hours has decreased by more than 6%, to $1.58 trillion, of which Bitcoin accounts for almost half, 758 billion, for a total of 48% of the volume.

Free newsletter.

Sign up for free to our free cryptocurrency, NFT, and Metaverse newsletter. and you will receive our analysis of the main cryptocurrencies and assets of interest every week.