Bitcoin Dips Below $39K Amidst ETF Debut's 'Sell-the-News' Trend

• Bitcoin Dips Below $39,000 Amid Potential Spot Exchange-Traded Fund Approvals in the US
• Downtrend Details
• Selling Pressure on Bitcoin
• Understanding Sell the News
• Spot Bitcoin ETFs Approval in the US
• Future Projections

Bitcoin Dips Below $39,000 Amid Potential Spot Exchange-Traded Fund Approvals in the US

Bitcoin$42,260 -0.64% (BTC) experienced a decline below $39,000 during European trading hours on Tuesday, effectively erasing almost all gains made over the past two months in anticipation of spot exchange-traded fund (ETF) approvals in the US. Over the last 24 hours, BTC registered a nearly 5% drop, hitting a two-month low. The Source 20, a liquid index of high-cap tokens, likewise fell by 7%.

Downtrend Details

The cryptocurrency bottomed out at around $38,700 before witnessing a slight recovery. The token had soared to a two-year high exceeding $49,000 as spot bitcoin ETFs started trading in the US on January 11.

Selling Pressure on Bitcoin

Notable selling pressure on Bitcoin has been linked to liquidation from the FTX$3.28 -5.38% bankruptcy estate, which has unloaded roughly 22 million shares of Grayscale's GBTC in recent weeks, as reported by The Source. CryptoQuant, an on-chain analysis firm, was among few contrarian speculations that the ETF approval would trigger a sell-the-news event.

Understanding Sell the News

Sell the news is a term commonly used in capital markets. It refers to the trend where asset prices, leverage, and sentiment drive prices upwards in anticipation of a positive event, only for prices to plunge shortly after.

Spot Bitcoin ETFs Approval in the US

The approval of spot bitcoin ETFs in the US was a highly anticipated event and well-priced. Analysts at the Japan-based crypto exchange bitBank speculated that the event is likely to be a short- to mid-term top for the price.

Future Projections

Earlier this month, analysts at 10X Research, guided by Markus Thielen, predicted that Bitcoin could drop to a minimum of $38,000 in the near future based on technical analysis. On the other hand, CryptoQuant's target remains significantly lower at $32,000.

Edited by Jonathan Stoker