Major cryptocurrencies ended the week on the lower side as interest in Bitcoin spot exchange-traded funds (ETFs) continued to wane.
According to data from Google Trends, searches for the keyword ‘Bitcoin ETF’ dropped to a ranking of less than 8 on January 22, from a maximum interest of 100 that it reached on January 10, the day the US Securities and Exchange Commission (SEC) approved the Bitcoin-focused investment products.
BTC Could Decline to $38,000 Before Block Reward Halving in April
Cryptocurrency analyst Michael Van de Poppe wrote in an X post that the total market capitalization for crypto “seems ready for another push towards $2.1 trillion”. However, he noted that it will be achieved through tokens other than Bitcoin.
“Consolidative period, before the next impulse, is likely going to occur,” added the crypto veteran.
The global cryptocurrency market capitalization currently stands at $1.69 trillion, experiencing a 1.8% decline in the past 24 hours. Meanwhile, the 24-hour trading volume of the crypto market on Sunday was $37.89 billion with Bitcoin (BTC) continuing to dominate with a 47.5% market share, followed by Ether (ETH) at 17.2%.
Pseudonymous cryptocurrency analyst Crypto Tony speculated the possibility of Bitcoin (BTC) dropping to the $38,000 range before the upcoming halving event in April where the subsidy earned from mining a block on the Bitcoin network is cut in half.
Meanwhile, on-chain analytics firm Santiment reported that Bitcoin experienced a rapid 3% surge over the last 3 hours, resulting in the leading cryptocurrency briefly regaining the $42,000 threshold just as the market appeared gloomy for traders. The positive momentum came as BTC was closing in on falling below $40,000 as predicted by Crypto Tony.
ETFs Fail to Propel Bitcoin Price to New Record Highs
The recent launch of Bitcoin spot ETFs has left the cryptocurrency market in an uncertain position, resulting in analysts struggling to find a clear trend in BTC prices. While the apex cryptocurrency did not experience a significant downturn over the weekend, it did fail to provide much optimism for traders hoping for new record highs.
Although the BTC price stabilized above the $41,000 level, it lacked a convincing trend, leaving many market participants uncertain about the direction it may take.
Prominent crypto trader Rekt Capital cautioned that Bitcoin had dropped into the weekly range low after encountering a new resistance. The analyst also noted that a weekly close below the range low could be bearish and initiate a “breakdown process” for the cryptocurrency.
Analysts say Bitcoin’s Volatility has Reduced as Traders Take a Cautious Approach
Joe McCann, the founder of crypto fund Asymmetric, highlighted that Bitcoin’s volatility had greatly reduced following the launch of BTC spot ETFs. He pointed out that there was a significant decrease in the cryptocurrency’s trading volume post-launch.
McCann also noted that the spread between implied and realized volatility for Bitcoin had reached its widest point, indicating that the decline in trading activity may be due to the cautious approach taken by investors as they await further developments in the market.
The launch of spot Bitcoin exchange-traded funds (ETFs) in the US was one of the most eagerly anticipated events of the year in both the traditional finance and crypto markets. The product provides retail and institutional investors with a more accessible way to gain exposure to the cryptocurrency without directly holding it.
However, the impact of Bitcoin ETFs on the price of the underlying cryptocurrency and its overall market dynamics remains to be seen.
At the time of writing, Bitcoin (BTC) is trading at $40,798 – down 2.1% in the last 24 hours.
