Türkçe
Español
Bitcoin price increased by 160% during a year-long rally in 2023, fueled by the ETF craze. However, January did not go as expected for Bitcoin. In short, the overbought market that had been building up with increasing optimism about SEC’s Bitcoin ETF approvals ended in January, leading to a correction on the Bitcoin side.
Why Did Bitcoin Fall in January?
The crypto industry celebrated a major victory when the D.C. Appeals Court ruled in favor of Grayscale last August. The crypto hedge fund’s lawsuit claimed that the SEC’s decision to reject a Bitcoin ETF proposal was arbitrary. The judge ordered the SEC to demonstrate a good faith effort in approving an ETF application. Following this, Bitcoin’s price gained significant momentum starting in October.
Weeks filled with headlines about progress between a dozen ETF applicants and the SEC led to Bitcoin’s rise. Bitcoin increased by 80% in just over four months, from $25,811 on September 1 to $46,670 on January 10.
What Happened After ETF Approvals?
Some Bitcoin investors continue to follow a long-term strategy of accumulating and holding without selling. They are extremely confident in the tremendous upside remaining in the global adoption curve of cryptocurrency and are hesitant to sell their assets. However, daily traders focused on price arbitrage were inclined to take profits in January.
Antoni Trenchev, co-founder of crypto lender Nexo, says the falling Bitcoin price in January is an example of the “buy the rumor, sell the news” process for liquid assets in the currency markets. A Motley Fool report summarized the situation as follows:
“It seems that some short-term investors drove up the cryptocurrency’s price with the expectation of recent ETF approvals and then quickly took profits as the excitement waned.”
Sean Farrell, head of crypto asset strategy at Fundstrat Global Advisors LLC, shared the following remarks about Bitcoin in a recent note:
“Over the past two weeks, Bitcoin has been challenged by tougher macro conditions as evidenced by rising rates and a strengthening dollar.”
As analysts at the crypto exchange Bitfinex wrote in a note on January 23, Bitcoin’s price fell in January because a downward trend seemed to prevail. They are expecting key support levels at $38,000 and $36,000 if the correction continues, but the 5% rise on Friday could mean a recovery for Bitcoin.
