At the time of writing, Bitcoin (BTC) was trading at its 24-hour low of $41,735. The cryptocurrency market is abuzz with speculation about the reasons behind the ongoing decline, which is linked to the anticipated ETF approval in January. Let’s delve into the factors contributing to the recent drop.
Despite growing optimism for the approval of a spot Bitcoin ETF, some experts warned that the official announcement might trigger a “sell the news” event. This led to investors securing profits, resulting in heavy sell-offs in BTC and altcoins. Many are now looking forward to a second, more significant surge post-ETF approval.
Investors should note that this “sell the news” scenario may not play out as usual. To validate the ETF’s impact, over $1 billion in robust trading volumes must be observed in the first week following approvals.
On another front, ongoing BTC sales by miners are making it difficult for buyers. Miners, reaping significant profits from transaction fees due to Ordinals and satisfied with the current BTC price level, are selling to mitigate potential regrets in case of a price drop.
The upcoming weekend coincides with the year’s end, which may result in fewer investors trading on exchanges. This could lead to weaker volumes and potentially exacerbate the negative sentiment from continued profit-taking.
In summary, the current decline in Bitcoin’s value is influenced by expectations of a spot Bitcoin ETF approval, miners’ sales, and a potential decrease in trading activity due to the year-end weekend. The market awaits to see if the anticipated ETF will bring a new wave of investment or if the downtrend will persist.