Bitcoin slipped below the $40,000 mark for the first time since early December as a broad price retreat took hold. Investor enthusiasm around the launch of exchange-traded funds has cooled, with direct investors reassessing positions in the largest cryptocurrency.
The digital asset traded down 5.3 percent to $39,556 around 2:42 p.m. New York time, its lowest level since December 4. Smaller tokens followed suit, with Ether easing about 6.7 percent and Solana down roughly 9.3 percent.
Fall after meteoric rise
Following a blistering bull run that propelled Bitcoin up nearly 160 percent in 2023 and outperformed traditional assets such as gold and stocks, the asset has mostly retraced this year. Much of the surge was driven by expectations that U.S. regulators would approve spot Bitcoin ETFs, a decision that traders had anticipated would unlock fresh inflows. The milestone occurred on January 10 in the United States.
Across global markets, declines stood in contrast with a mixed trading backdrop. Global equities ticked higher, with Europe’s STOXX index nudging up about 0.7 percent and the Nasdaq 100 inching higher by around 0.2 percent as investors kept a cautious stance ahead of impending fourth-quarter GDP data. The mood remained tentative as markets weighed resilience in the U.S. economy against incoming data and policy signals.
Collection of benefits
Analysts noted weakening across most digital assets even as new ETF inflows to cryptocurrency products have yet to fully offset profits accumulated by speculative positions taken earlier. Caroline Mauron, CEO of Orbit Markets, a digital asset derivatives liquidity provider, commented that while the $40,000 level remains a psychological barrier, a breakout beyond that point does not appear imminent at present. She added that a support zone near $38,000 could help anchor prices if selling interest emerges in size.
European Central Bank’s unexpected twist on bitcoin vision
It marks the first week of spot Bitcoin ETF trading in the United States, with about $6.5 billion worth of shares exchanging hands. That turnover is well above the activity typically seen in ETFs tied to traditional assets, according to a note from Bloomberg Intelligence published Friday.
Market sentiment has cooled since the ETF launch and leverage exposure has continued to trend downward, suggesting investors are cautiously building new positions. Fadi Abualfa, head of research at Copper Technologies Ltd., noted that sentiment remains constructive and the market could enter an interesting phase ahead as participants digest the evolving regulatory and product landscape.