Bitcoin’s Monthly Winning Streak Ends as ETF Excitement Fades
Bitcoin posted its worst streak in about a month after the US Securities and Exchange Commission approved spot Bitcoin (BTC) ETFs.
The leading cryptocurrency remained highly volatile in the past few days, ultimately trading little changed at $42,655 as of now.
The recent decline marked the longest losing streak for Bitcoin since mid-December, leaving investors puzzled about the cryptocurrency’s short-term direction.
The catalyst for this recent bout of turbulence was the introduction of nearly a dozen US exchange-traded funds (ETFs) focused on cryptocurrencies, including offerings from investment giants BlackRock Inc. and Fidelity Investments.
These ETFs officially started trading on January 11th, and Bitcoin initially surged to a two-year high above $49,000 in response.
However, the enthusiasm quickly faded, and the cryptocurrency retraced its steps.
Market analysts have attributed the Bitcoin price action to a classic “buy-the-rumor, sell-the-fact reaction.”
Tony Sycamore, a market analyst at IG Australia Pty, noted that chart patterns suggest a possible slide to the $38,000 to $40,000 range for Bitcoin.
This pattern suggests that the excitement over the ETFs had been largely priced into the market, leading to profit-taking by some investors.
Supporters of Bitcoin argue that these US spot ETFs represent a significant milestone for the cryptocurrency, providing increased access for institutional and retail investors.
On the other hand, skeptics point to the tumultuous year that cryptocurrencies, particularly Bitcoin, experienced in 2022, marked by a deep crash and subsequent bankruptcies.
Despite a partial market rebound last year, concerns about wider adoption linger.
Eric Balchunas, Bloomberg Intelligence’s senior ETF
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