Bitcoin’s momentum slowed, nearing a fall below the $40,000 threshold on Monday. This decrease contrasted sharply with the broader rally in traditional markets.
As cryptocurrencies, including Bitcoin, lost value, global markets like the STOXX Europe index and Nasdaq 100 futures showed gains.
While traditional markets were buoyed, Bitcoin dropped to $40,352, close to its 2024 low.
Other digital currencies also faced downturns. Ether fell by 4.1%, and smaller tokens like Solana’s SOL and Dogecoin decreased by 3.9% and 2.1%, respectively.
This decline occurred amidst optimism about the U.S. economy’s resilience as investors anticipated the upcoming release of fourth-quarter GDP data.
Caroline Mauron, CEO of Orbit Markets, attributed the weakness in digital assets to insufficient new ETF inflows and counterbalanced profit-taking by speculative traders.
Despite Bitcoin approaching the psychologically significant $40,000 level, Mauron does not foresee a cascade of selling. Instead, she predicts a next support level of around $38,000.
The initial trading week for U.S. spot bitcoin ETFs saw about $6.5 billion in trades, surpassing traditional asset-linked ETFs.
Fadi Aboualfa, head of research at Copper Technologies, noted a shift in sentiment post-ETF listings and a reduction in leverage use, suggesting a cautious stance by traders.
This situation in the crypto market, particularly regarding Bitcoin, reflects the fluctuations within digital assets and their interplay with broader market trends and investor sentiments.
The focus now shifts to how these factors will shape the market’s future trajectory.