Bitcoin faces further pressure on Monday, edging perilously close to the $40,000 mark as the broader cryptocurrency market experienced a sea of red. This downturn unfolded despite a rally in traditional markets, with global equities advancing and US futures signaling another potential record for Wall Street.
The world’s largest virtual token encountered a 3.4% decline by 7:30 a.m. in New York, reaching a low of $40,352—hovering just above its lowest point of 2024 recorded on Friday. Ether, the second-largest cryptocurrency, mirrored the trend with a 4.1% drop, while smaller tokens like Solana’s SOL and Dogecoin faced declines of 3.9% and 2.1%, respectively.
Caroline Mauron, CEO of digital-asset derivatives liquidity provider Orbit Markets, attributed the weakness in digital assets to profit-taking by speculative traders, despite new ETF inflows. Mauron commented, “While $40,000 might be an important psychological level, we don’t expect a breakthrough to trigger a cascade of liquidation here, and see the next support level around $38,000.”
The first week of trading for spot Bitcoin ETFs in the US witnessed substantial activity, with approximately $6.5 billion in shares changing hands—a figure notably higher than that recorded in ETFs tied to traditional assets, according to a Bloomberg Intelligence note on Friday.
Market sentiment has slowed down following the ETF listings, and the use of leverage is on a downward trend, signaling cautious positions among traders, noted Fadi Aboualfa, head of research at Copper Technologies Ltd. He added, “Things are shaping up to be very interesting.”
In conclusion, the cryptocurrency market remains on edge as Bitcoin faces further pressure, approaching the critical $40,000 threshold amidst broader market dynamics and heightened investor caution. As the cryptocurrency market navigates this period of volatility, investors are closely monitoring developments, especially with the upcoming release of fourth-quarter GDP data for the US on Thursday. The juxtaposition of crypto downturns against the backdrop of positive performances in traditional markets adds a layer of intrigue to the current landscape.
Source: Bloomberg
