Crypto Market Takes a Bearish Turn as Bitcoin Dips Below $42,000
Bitcoin’s price dropped below $42,000 early Monday morning as the crypto market experienced a bearish turn. This decline comes after multiple spot Bitcoin ETFs started trading in the U.S. last week. According to CoinGecko, Bitcoin briefly reached a low of $41,753.68 before recovering to its current level of $42,600. This represents a decrease of around 0.6% for the day and 3.5% over the past week.
Momentum Fades as Traders Sell the News
Last week, when the first spot Bitcoin ETFs began trading in the U.S., Bitcoin’s price surged to almost $49,000. However, this momentum was short-lived as traders seemed to sell the news of this highly anticipated event.
Crypto Market Pullback and Decrease in Bitcoin Dominance
The wider crypto market also experienced a pullback over the weekend, with its total value dropping from just under $1.9 trillion on January 11 to $1.7 trillion today. Additionally, Bitcoin dominance decreased from 49.32% to 47.6%. CoinGlass data showed that Bitcoin open interest slipped from $20.05 billion to $18.37 billion during the same period.
Market Sentiment Turns Neutral as Crypto Fear & Greed Index Drops
The start of Bitcoin ETF trading in the United States has negatively impacted market sentiment, resulting in a plunge in prices. The Crypto Fear & Greed Index dropped to “neutral” for the first time since November 2023, falling to a level of 52 after reaching a high of 76 prior to the approval of spot Bitcoin ETFs. This index measures sentiment across the crypto market, considering factors such as volatility, market momentum and volume, social media, Google Trends data, and market dominance.
Hot Take: Bearish Turn for Bitcoin and Crypto Market
The recent dip in Bitcoin’s price below $42,000 and the subsequent pullback in the wider crypto market indicate a bearish turn. This decline comes after the introduction of spot Bitcoin ETFs in the U.S., which initially caused a surge in prices but was followed by traders selling off their holdings. As a result, market sentiment has turned neutral, as indicated by the Crypto Fear & Greed Index. It remains to be seen how these developments will impact the future of the crypto market.
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