Bitcoin’s Valuation Recedes After ETF Approval
Bitcoin’s valuation reached a two-year high of nearly $49,000 following the approval of a spot Bitcoin exchange-traded fund (ETF) in the United States. However, the impact of the ETF seems to be diminishing as investors take profits amid subdued hype. The Crypto Fear & Greed Index, which measures sentiments among participants in the financial market, reflects this shift in sentiment.
Declining Index Indicates Decreased Sentiment
Data obtained on January 14 shows a consistent decline in the Crypto Fear & Greed Index. From January 11 to January 14, the index dropped from 76 to 60, representing a 21% decrease. Although it remains in the ‘Greed’ zone, the index has been steadily dropping due to anticipation of the spot ETF launch.
ETF Hype Fails to Hold
The market is moving on from the enthusiasm surrounding spot Bitcoin ETFs and focusing on the potential approval of a similar product for Ethereum (ETH). This shift in conversation is influencing the price of Bitcoin, making it vulnerable to dropping below the $40,000 support zone. The underwhelming performance of spot Bitcoin ETFs raises questions about market demand for such products.
Bitcoin Price Analysis
As of now, Bitcoin is trading at $42,793 with weekly losses of almost 4%. Since the ETF approval on January 10, BTC has plunged by about 14%. Technical analysis indicates bearish sentiments for Bitcoin, with indicators signaling a ‘sell’ sentiment.
Hot Take: Attention Shifts to Sustaining Gains
With the diminishing hype around the ETF, attention has turned to Bitcoin’s ability to sustain gains above the $40,000 mark. The market behavior of “buying the rumor and selling the news” has contributed to the drop in Bitcoin’s price following the ETF approval.
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