Over the past day, bitcoin’s value has experienced further decline, now plummeting below the $39K mark as ongoing bearish trends exert downward pressure. Following its dip under the $40K barrier on Monday, the leading crypto asset further depreciated by 5.3% relative to the U.S. dollar within the last 24 hours.
From Boom to Gloom: Bitcoin’s Value Sinks Below $39K Amidst Market Speculations
In terms of its market value, bitcoin (BTC) has witnessed more prosperous times. After breaching the $40,000 level on Jan. 22, it has now descended below $39,000. On Tuesday, bitcoin’s value hit a nadir of $38,600, marking a 5.3% decrease in a single day and a 9.8% reduction over the week. Over a two-week period, bitcoin has depreciated by 16.8% in comparison to the greenback.
The current downturn in bitcoin’s price is rife with speculation, particularly concerning Grayscale’s GBTC outflows and the notion of spot bitcoin exchange-traded funds (ETFs) being a “sell the news event.” In a note shared with Bitcoin.com News, Etoro’s market analyst, Simon Peters, discussed the prevalence of GBTC’s recent outflows.
“GBTC from Grayscale still holds the most bitcoin of any of the spot ETFs with 53% of the market share, however, this was all acquired from its days as an investment trust, before it made the conversion to an ETF,” Peters said on Monday. “GBTC since becoming an ETF has actually seen net outlaws totaling 66,500 BTC (around $2.6 billion at current market prices) in all likelihood due to the high fees prompting investors to switch to lower fee alternatives.”
The analyst added:
The approval of the bitcoin spot ETFs has proved to be a ‘sell the news’ event. Since the ETFs went live on 11th January the bitcoin price is down 16% with some long-term holders banking profits.
Besides the GBTC outflows, xs.com‘s market analyst, Antonio Ernesto Di Giacomo, shared with Bitcoin.com News that additional elements might also be influencing the situation. Di Giacomo says that the price growth of more than 90% in less than a year has possibly led to “massive sales [that] could have knocked down the price.” Furthermore, the analyst pointed out that miners might be contributing to some of the prevailing pressure.
“Another factor that could have contributed to bitcoin’s collapse, today, could be that miners started selling their bitcoins as it happened a few months before the May 2020 Halving,” Di Giacomo wrote. “This event, which will occur in April 2024, is the process that reduces the rewards for mining bitcoin. Faced with the possibility of changes in the value of the digital asset, miners take advantage of good price opportunities to accelerate their liquidations and this oversupply could push the price down,” the analyst added.
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