- Bitcoin’s price has dropped below $39,000, reaching its lowest level since early December and declining 19% from its post-ETF approval peak.
- The drop has erased gains made in anticipation of the first U.S. bitcoin futures ETFs being approved by the SEC. Outflows from GBTC are contributing to selling pressure.
- Despite recent weakness, bitcoin’s long-term bull case remains intact due to growing institutional adoption, scarcity, and its “digital gold” reputation. This correction is seen as temporary.
Bitcoin‘s price has fallen below $39,000, reaching its lowest level since early December. The cryptocurrency declined nearly 2% on Tuesday, extending the previous day’s 4% drop.
Bitcoin Down 19% From Post-ETF High
Bitcoin has now tumbled about 19% from its post-ETF approval peak of $49,048 on November 9th, according to FactSet data. The declines have erased gains made in anticipation of the first U.S. bitcoin futures ETFs being approved by the SEC.
Outflows from Grayscale Bitcoin Trust
Some analysts point to selling pressure stemming from outflows totaling $2 billion from the Grayscale Bitcoin Trust (GBTC) since January 19th. However, inflows into other bitcoin ETFs like the iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund have offset these outflows.
Waiting Out the Expected Correction
Investors seem to be waiting out this correction, which many anticipated as a “sell the news” event after the long-expected ETF approvals. With unrealized profits to protect, traders are willing to let Bitcoin’s price fall before buying back in at lower levels.
Support Level to Watch
In the near term, the $36,000 level is seen as key support to watch. But most experts still see bitcoin reaching new all-time highs later this year after bottoming out from this correction.
Pulling Down Wider Crypto Assets
The drop in Bitcoin is dragging down other major cryptocurrencies as well. Ether, Solana, Uniswap and XRP were all down between 5-7% on Tuesday. Crypto-related stocks like MicroStrategy, Marathon Digital, Riot Platforms, and Coinbase also fell 2-4%.
Long-Term Bull Case Intact
Despite recent weakness, bitcoin’s long-term bull case remains intact. Growing institutional adoption, scarcity, and its reputation as “digital gold” are seen as enduring tailwinds. This correction is viewed by many as temporary rather than the start of a new bear market.
