Bitcoin’s recent price slump and declining volumes have led to significant losses for altcoin investors. A sharp sell-off on January 22, 10 days after a previous drop on January 12, triggered a double-digit meltdown in altcoins and a test of the $38,500 level. Ordinal inscription tokens like ORDI and SATS are experiencing even faster drops.
The major decline in altcoins has been exacerbated by the news of an ETF, which has significantly impacted ordinal tokens such as ORDI and SATS. Following the Taproot update in late 2021, which we had discussed as a gateway for such tokens, the craze for ordinals began mid-last year, leading to substantial gains and listings on popular exchanges. However, following the ETF approval, ORDI and SATS prices plummeted by 34% and 50% respectively in January, primarily due to billion-dollar market sell-offs.
Moreover, the correlation coefficient between these tokens and Bitcoin, which was expected to be high, has dropped to 0.66, indicating a potential loss of momentum in the market excitement surrounding them.
While the ETF approval was expected to increase interest in the Bitcoin ecosystem and may do so in the long term, the short-term outlook for ORDI and SATS is not optimistic. Technical indicators had already signaled a downturn, with classic bearish divergence patterns forming on the ORDI/USDT and SATS charts, suggesting an impending deeper decline.
The outlook for SATS is relatively more positive than ORDI, as previous resistance levels are turning into support and the token has completed an oversold period. If SATS can maintain its support level, it may reach a peak price of $0.00000043 within a week, while a loss of support could lead to a new low at $0.0000029.