Bitcoin experiences a decline in price as investors take profits following its impressive December rally. The cryptocurrency’s value drops by approximately 3.6% to $42,151.38, according to Coinbase. This dip comes after a significant decrease in price on Sunday night, briefly reaching around $40,300. Bitcoin had surpassed $44,000 the previous week and remained just below that level over the weekend.
Ether, another popular cryptocurrency, also sees a decline of 4% on Monday, dropping to $2,238.38. Similarly, Solana’s SOL token and Ripple’s XRP each lost around 5%.
Coin Metrics reports that these are the worst days for bitcoin and ether since August 18th and March 9th, respectively.
The recent decrease follows a 12% surge in bitcoin’s value during December. The cryptocurrency market anticipated that the SEC might approve the first spot bitcoin exchange-traded fund (ETF) in early January. Should this happen, Galaxy Digital estimates the U.S. bitcoin ETF’s market size to be about $14 trillion in its first year of operation, eventually reaching approximately $26 trillion in the second year.
Analysts, such as Rob Ginsberg from Wolfe Research, believe that bitcoin’s momentum remains strong and has not been seen since early 2021 when it reached its all-time high. The months of October and November alone witnessed a 56% increase in bitcoin’s price.
Bitcoin had been steadily rising in recent weeks, after a prolonged period of stagnant market activity where its price remained within a narrow range for months.
This sudden decrease prompts a surge in liquidations, with approximately $93.44 million worth of bitcoin long positions liquidated in the past 12 hours, as reported by CoinGlass. Ether also experiences $65.42 million in liquidations.
Ginsberg and chart analysts agree that the current bitcoin uptrend still has significant momentum. A new bitcoin spot ETF is among several positive factors expected to impact bitcoin in the coming year. While some potential investors are eagerly awaiting the arrival of the ETF, others remain optimistic about price increases following the Bitcoin halving, anticipated to occur in spring 2024.
Source (CNBC)
