The event that was expected to drive the price higher was more of a news selling event. Many large BTC holders began selling their holdings as the price did not skyrocket immediately following the news.
While short-term sentiment remains negative, most experts do not view this decline as fatal just yet. A Bitcoin price recovery is also expected to boost investor confidence in altcoins.
The price of Bitcoin (BTC) has continued to fall, recording a 10% drop in the last 7 days. This descending pattern has been the order shortly after the approval of Bitcoin spot ETFs on January 10.
Bitcoin Price Rising Boosted Other Major Cryptocurrencies
The price of Bitcoin had risen to new highs in the weeks leading up to the ETF’s approval, and many anticipated that the event would cause the price to rise to its all-time high or beyond. Bitcoin price started rising in September 2023, from $25,000 to $48,000 on January 12, just 2 days after the spot approval of the BTC ETF.
The September surge also triggered a bull run for Solana, Ethereum, and many other major altcoins from October until the end of the year. However, since the initial rumors surrounding the approval of the ETF could not hold up, many large holders also began to dump their holdings, causing the price to fall. Currently at $38,000, the near 20% drop is substantial for the cryptocurrency market.
Analysts Expect Further Fall
Many traders expect the $38,000 support to hold, but if it doesn’t and the short-term negative sentiment continues, Bitcoin is poised for a continued slide to lower levels. A notable crypto analyst, Ali, on his According to him,
Bitcoin has fallen to the 50% Fibonacci retracement level in the last 2 bull cycles after reaching the 78.6% level, and if this pattern happens again, it means that we may continue to see such a price drop. low. such as $32,700, where the current 50% Fibonacci retracement level is located.
On January 23, X user @Ali posted the following:
“Reflecting on the last two bull cycles, $BTC typically retraced to the 50% Fibonacci level after hitting the 78.6% Fib. Recently, Bitcoin reached this 78.6% Fib level again, suggesting a potential correction. If this pattern holds true, we could see #BTC drop to $32,700, aligning with the 50% Fibonacci retracement.”
Another notable analyst on X, MikybullCrypto, mentions that the decline is not over yet. He also expects the price to drop a little further before there is a chance of a rally. Additionally, MikybullCrypto continues to encourage its nearly 60,000 followers to keep buying on dips using a dollar-cost averaging (DCA) strategy.
Altcoins Also Continue to Fall
The negative market sentiment has also affected many other cryptocurrencies. Solana is down 17% in the last week; Avalanche has also decreased by more than 22% in the same period; and Ethereum is down 12%.
The difficult time these coins are going through is also affecting the tokens in their ecosystems, even those that have performed well recently. An example is BONK in the Solana ecosystem, which has seen a drop of close to 50% in one month. Additionally, the Avalanche blockchain JOE token has fallen over 40% in 4 weeks.
While short-term sentiment remains negative, most experts do not view this decline as fatal just yet. A Bitcoin price recovery is also expected to boost investor confidence in altcoins.
By Audy Castaneda
