What Are the Key Factors Behind Today’s Decline in Bitcoin Price? Understanding the Main Drivers of the Downtrend
Bitcoin’s price has experienced a 5% decline in the past 24 hours, dropping to $43,791 from its recent high of $48,000. This decrease can be attributed to the delay in approval from brokerage firms’ compliance departments for new products, according to Dan Ripoll, managing director of Swan Bitcoin. Notably, major broker-dealers like Vanguard, UBS, Citi, and Merrill Lynch have restricted or completely disallowed retail clients from purchasing spot Bitcoin ETFs. Ripoll predicts that this decision by Vanguard, based on a misalignment with their investment philosophy, could result in customer losses for adopting firms.
Cryptocurrency analyst Ash Crypto provides insights into the factors influencing Bitcoin’s downturn after the historic spot ETF approval. Ash explains that the dissipation of pre-approval speculation has led to profit-taking and disappointment among investors who expected a significant increase to $55,000. Furthermore, the impressive surge in Bitcoin’s price from $15,400 to $49,000 driven by ETF-related fear of missing out (FOMO) has created a natural correction, resulting in a “sell the news” scenario for those who entered the market at lower prices.
Investors have also shown a shift in behavior, with some reallocating funds from Bitcoin to Ethereum (ETH). Ethereum has risen by 9.1% in the past week, outperforming Bitcoin. This move is attributed to the anticipation of an upcoming ETH spot ETF and the belief that ETH is currently undervalued compared to its potential.
Despite the downturn, Ash highlights several positive aspects that may have been overlooked by the market. The Bitcoin ETF achieved a historic volume of $4.3 billion, marking a significant milestone in ETF history. The accessibility of Bitcoin to Wall Street is seen as a positive development, with expectations of trillions of dollars flowing into the cryptocurrency market over time. The approval of a Bitcoin ETF is also seen as a step toward building trust in the broader crypto market.
Ash expresses a bullish outlook, believing that Bitcoin ETFs will gain popularity on Wall Street, leading to substantial allocations from companies. This could potentially drive Bitcoin’s price to reach $100,000 to $200,000 and beyond. The analyst advises investors to remain patient and resilient during market fluctuations, emphasizing the potential for long-term gains.