As the cryptocurrency market's enthusiasm for the listing of Bitcoin ETFs quickly faded, and profit-taking orders of "buying in anticipation of selling facts" continued to emerge, Bitcoin fell below the $40,000 mark for the first time since early December last year on Monday.Coindesk quotes show that Bitcoin prices fell nearly 5% throughout the day on Monday, reaching as low as $39,424, which is the lowest level since December 4. Some other cryptocurrencies suffered even steeper declines, with Ethereum and Solana down 6.7% and 9.3% respectively.


After experiencing a bull market last year that pushed Bitcoin up nearly 160%, most major cryptocurrencies are on a downward trajectory so far this year. The previous rally was largely due to expectations that the U.S. Securities and Exchange Commission (SEC) would approve a Bitcoin spot ETF. The SEC finally approved 11 companies’ Bitcoin ETF applications on January 10.

but,Affected by the trading psychology of "buying in anticipation of selling," Bitcoin quickly began to give up its gains after the SEC announced its decision to list spot ETFs.

Caroline Mauron, CEO of digital asset derivatives liquidity provider OrbitMarkets, said, “We are seeing weakness across all digital assets becauseInflows into the new ETF have so far failed to offset profit-taking by speculative traders on positions established before the announcement. "

Regarding the current situation of Bitcoin, Mauron believes that "$40,000 may be an important psychological level, but we do not believe that falling below this level will trigger a series of liquidations. The next support level is expected to be around $38,000."

Fadi Aboualfa, research director of Copper Technologies Ltd., pointed out in an email, "After the listing of ETFs, market sentiment is indeed no longer as enthusiastic as before, and the use of leverage continues to show a downward trend, indicating that traders are opening positions cautiously. Things are becoming more and more interesting."

Some analysts also said that they had actually expected Bitcoin to reduce some of its gains after the spot ETF was approved for listing. Antoni Trenchev, co-founder of crypto lending company Nexo, pointed out that previous major cryptocurrency events, including the IPO of crypto exchange Coinbase and the launch of Bitcoin futures, were all accompanied by similar Bitcoin plummets.

Trenchev added that Bitcoin was also affected by outflows from the Grayscale Bitcoin Trust, which faced significant redemption pressure after the SEC approved the listing of a Bitcoin spot ETF product earlier this month. Many investors reinvested funds originally invested in the trust into other Bitcoin investments.

It is worth mentioning that in sharp contrast to Bitcoin's plunge, European and American stock markets rose one after another on Monday. The Dow and S&P 500 hit record highs again on Monday, while the European Stoxx 50 also rose 0.7%. Market investors remain optimistic about the resilience of the U.S. economy ahead of U.S. fourth-quarter GDP data released on Thursday.

Trenchev said, “It feels like Bitcoin investors are running on a downward escalator now, as national benchmark stock indexes are more likely to hit record highs. The launch of spot Bitcoin ETFs may add to the list of failures in the history of cryptocurrency.”