Bitcoin Price Momentarily Drops Under $40,000, Marking Year’s Initial Decline

The price of the dominant cryptocurrency, bitcoin, fell sharply on 22 Jan 2024, declining below the $40,000 level for the initial occurrence this year. This extended the pullback that Bitcoin has seen after reaching an all-time high price in early January. The latest dip pulled the remainder of the crypto market down together with Bitcoin.

Bitcoin Price Momentarily

Bitcoin price slides to lowest since December

The price of bitcoin declined by 3.9% to reach $40,052.76 based on Coin Metrics’ data, marking its lowest price since December 3rd of last year. Earlier on Monday, bitcoin fell even lower to $39,414.80. The price drop for bitcoin on this day was the steepest since its record high on January 10th. Ether, the second largest cryptocurrency, also witnessed declines and descended 5% to trade at $2,333.00. This pullback for Bitcoin and other digital currencies has come after constant increases in their prices over the preceding few months.

Bitcoin is considered to still be in a period of correction following the approval of several bitcoin exchange-traded funds or ETFs in the United States for the first instance ever. In advance of these ETFs receiving regulatory permission, investors had purchased bitcoin anticipating endorsement, which drove the price upward. Nevertheless, the latest movements for bitcoin were wholly anticipated, according to the Chief Executive Officer of Defiance ETFs. This seemed to be a typical “sell the news” response, where after the approval, news traders’ cash in profits before bitcoin potentially recaptures its bullish trend once more.

Analysts foresee further potential downside

Potential downside

Technical analysts have warned that while Bitcoin’s long-term rising pattern stays intact, the coin may continue falling for now. On Monday morning, Fairlead Strategies’ Katie Stockton stated on CNBC that bitcoin could potentially decline to as low as $36,000, including that this dip wouldn’t be for a sustained period. Additionally, Rob Ginsberg of Wolfe Research commented it may simply be the beginning of a disappointing first quarter of the year for cryptocurrencies. The latest price movements have dampened market sentiment temporarily after the euphoria surrounding new records last month.

The largest cryptocurrency, bitcoin, saw its steepest single-day percentage fall. This took its price below the $40,000 level and deeper into correction territory from the all-time high. Other major digital currencies also witnessed sizeable declines on the back of weaker sentiment. While experts view this as a short-term pullback within an ongoing bull market, uncertainties persist around further downside before an upturn.

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