Bitcoin fell below $40,000 for the first time since the beginning of December last year as the market's enthusiasm for listing Bitcoin ETFs waned.
As of 2:42 p.m. New York time on Monday, Bitcoin once fell 5.3% to $39,556. This is the lowest level since December 4. The smaller Ether and Solana declined 6.7% and 9.3%, respectively.
After experiencing a round of bull markets that boosted Bitcoin by nearly 160% last year, digital tokens have mostly been on a downward trajectory so far this year. The previous rally was largely due to expectations that the US Securities and Exchange Commission (SEC) would approve a Bitcoin spot ETF. The SEC approved 11 companies' Bitcoin ETF applications on January 10. Driven by the “sell news” transaction, Bitcoin began to recoup some of its gains after the SEC announced its decision.
In stark contrast to this, global stock markets rose on Monday. The European Stock Index rose 0.7% and the Nasdaq 100 Index rose 0.2%. The market was still optimistic about the resilience of the US economy before the fourth quarter GDP data was released on Thursday.
“We are seeing weak performance for all digital assets, as capital inflows from new ETFs have so far failed to offset speculative traders' profitable settlement of positions established prior to the announcement,” said Caroline Mauron, CEO of digital asset derivatives liquidity provider Orbit Markets. “Although $40,000 may be an important psychological hurdle, we don't think falling below this level will trigger a series of liquidations. The next support level is expected to be around $38,000.”