Bitcoin Under $39K As ETF Debut Continues To Be a ‘Sell-the-News’ Event
Bitcoin (BTC) slumped under $39,000 during Tuesday’s European trading hours, reversing nearly all of the past two months’ gains carved out in anticipation of spot exchange-traded fund (ETF) approvals in the U.S.
Bitcoin Slumps Under $39K Amid ETF Debut
Bitcoin (BTC) has experienced a sharp decline, falling below $39,000 during Tuesday's European trading hours. This drop erases nearly all of the gains made in the past two months, which were driven by expectations of spot exchange-traded fund (ETF) approvals in the United States.
Over the past 24 hours, BTC has fallen by almost 5%, reaching its lowest level in two months. The CoinDesk 20, a liquid index of the highest tokens by market capitalization, also experienced a 7% decline.
The cryptocurrency briefly dropped to as low as $38,700 before recovering slightly. It had recently reached a two-year high of over $49,000 following the launch of spot bitcoin ETFs in the U.S. on January 11.
Selling Pressure and 'Sell-the-News' Event
One contributing factor to the recent selling pressure on bitcoin has been the sale of shares from the FTX bankruptcy estate, which sold around 22 million shares of Grayscale’s GBTC in the past few weeks. On-chain analysis firm CryptoQuant speculated that the ETF approval would result in a 'sell-the-news' event.
'Sell the news' refers to a phenomenon in capital markets where asset prices, leverage, and sentiment drive prices higher in anticipation of a bullish event, only for prices to decline shortly after the event. Analysts at Japan-based crypto exchange bitBank believe that the approval of spot bitcoin ETFs in the U.S. was well anticipated and priced, making it likely to be a short- to mid-term top for the price.
Earlier this month, analysts at 10X Research predicted that bitcoin would drop to at least $38,000 based on technical analysis. CryptoQuant has an even lower target of $32,000.
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