22 Jan

In spite of recent attempts to rally, the bears appear to be in control as the price of bitcoin is heading towards $40K.

The price of bitcoin has dropped 4.4% during the last seven days and around 16% from its peak on January 11th, when it was $48,500. Now that the cryptocurrency is perilously approaching the crucial psychological threshold of $40K, there is a debate on whether or not the correction will go on.

Having said that, let us examine several plausible explanations for the current downturn, along with a few potential triggers for favourable advancements in the near future.

Underwhelming Bitcoin ETF Launch

After years of intense efforts by several ETF providers, the spot Bitcoin exchange-traded fund has finally materialised. Earlier this month, the US Securities and Exchange Commission gave the product the go-ahead.

Please read the following article to see the entire timeline leading up to that event:
Timeline of Events That Led to US Approval of the Spot Bitcoin ETF. There were some glitches with the launch. It was, in fact, really disappointing. Days before of the scheduled confirmation date, the agency's X account was hacked. Falsely tweeting that the Bitcoin ETF was approved, the culprit set off a two-way price spiral that resulted in the liquidation of leveraged holdings valued at millions of dollars.

The SEC finally removed the link carrying the order when the official announcement and date arrived since they had released it during trade hours rather than after.
However, the following day saw a sharp rise in the price of Bitcoin, which peaked at about $48,500 in January.
However, given that the ETF inflows were insufficient to offset the ongoing selling pressure, it seems that the launch was a "sell-the-news" event. as Bitcoin approaches $40,000.

Overheated Crypto Markets

The cryptocurrency markets, in general, were trending upward without considerable corrections for a prolonged period of time before the current decline.The main reason behind the increase was largely the anticipation of the approval of a spot BTC ETF.

As seen in the chart, the price went from around $26K in the middle of October to a high of $48,500 in January without almost any corrections. This represents an increase of about 86%.Additionally, the popular Crypto Fear & Greed Index has been giving signs of an overheated market for quite a while. It’s been trending in the higher numbers for quite a while. 

When Will the Bulls Come Back?

At this pace, it's evident that sellers have been in control for the last few weeks, and many people are unsure of when and if the bulls will return.Although it is difficult to predict future changes in the price of Bitcoin, the halving is actually very close.

This significant change to the Bitcoin network is scheduled for April of this year. It will reduce block rewards by half, which will restrict the amount of newly created BTC available on the market and also cut the inflation that is pre-programmed in half.Major bull markets have typically preceded the event, and a number of observers believe that this cycle will be no different.

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