Bitcoin (BTC) Plummets Nearly 5% to Two-Month Low Following U.S. ETF Approval Hype

Bitcoin (BTC) Plummets Nearly 5% to Two-Month Low Following U.S. ETF Approval Hype

Crypto News – Bitcoin (BTC) experienced a significant downturn during the last 24 hours, dropping by nearly 5% and reaching its lowest point in two months. This decline comes after a period of anticipation surrounding the approval of spot exchange-traded funds (ETFs) for BTC in the United States, which had driven the cryptocurrency to its highest levels in two years, surpassing $49,000.

During Tuesday’s European trading hours, BTC slipped below $39,000, effectively erasing most of the gains it had made in the past two months. The broader cryptocurrency market, as represented by the CoinDesk 20 index, also saw a substantial 7% decrease in value.

One contributing factor to the recent downward pressure on Bitcoin has been the sale of approximately 22 million shares of Grayscale’s GBTC by the FTX bankruptcy estate over the past few weeks, as reported by CoinDesk. Some analysts had taken a contrarian view, suggesting that the approval of the ETFs would lead to a “sell-the-news” event.

In financial markets, “sell the news” is a common phenomenon where asset prices tend to rise in anticipation of a positive event, only to decline shortly after the event actually occurs.

The approval of spot Bitcoin ETFs in the United States had been widely anticipated and already factored into market expectations. As a result, some analysts from Japan-based crypto exchange bitBank believe that this event is likely to represent a short- to mid-term peak in Bitcoin’s price.

Earlier this month, analysts from 10X Research, led by Markus Thielen, had predicted that Bitcoin could drop to at least $38,000 based on technical analysis. CryptoQuant’s target for a lower Bitcoin price remains even more conservative at $32,000.