Bitcoin falls below key $40k threshold amid continued sell off
The decline to around $40,000, Bitcoin's lowest level since mid-December of the previous year, has been driven by a sustained sell-off amid a series of macroeconomic and market-specific factors.
Bitcoin has plunged below the critical threshold of $40,000, marking a significant downturn in the cryptocurrency’s value.
Bitcoin was trading at $39,640 as of press time, down 18% from its peak of $49,000 earlier in January.
The decline to around $40,000, Bitcoin’s lowest level since mid-December of the previous year, has been driven by a sustained sell-off amid a series of macroeconomic and market-specific factors.
Dollar headwinds
A key contributor to Bitcoin’s recent woes is the unexpectedly robust U.S. economic data, which has led to a tempered outlook for rate cuts by the Federal Reserve.
This situation has bolstered the U.S. bond yields and the U.S. Dollar Index (DXY), creating substantial headwinds for cryptocurrencies at large.
The U.S. interest rate futures market is still pricing in a near 50% chance of a 25-basis point rate cut in March, despite recent data and Federal Reserve policymakers suggesting otherwise. This dynamic poses potential macroeconomic challenges for Bitcoin.
The approval of several spot Bitcoin ETFs in the U.S. has also played a key role in the volatility. While these ETFs initially drew significant capital inflows, they also triggered a “sell-the-news” reaction, contributing to the bearish momentum.
GBTC outflows
Notably, Grayscale’s Bitcoin Trust (GBTC) experienced substantial outflows, with 52,800 BTC sold since its conversion to a spot ETF, reflecting both a shift towards new investment products and profit-taking activities.
According to recent reports, FTX has sold $1 billion worth of GBTC shares since it was converted to an ETF, making up a significant portion of the total outflows. The defunct exchange has sold-off almost the entirety of its holdings as of Jan. 22, which could lead to a reduction in the recent recent sell pressure.
Despite the heavy sell-off, the nine newly launched ETFs have accumulated more Bitcoin than Grayscale has sold over the same period, as their assets under management hit $4.1 billion within six days of trading.
The “ Newborn Nine” had purchased 95,000 BTC as of Jan. 20, led by BlackRock and Fidelity’s ETFs — the two make up over 50% of the collective $4.1 billion in assets under management.
CryptoSlate research revealed that the selling pressure was further compounded by short-term holders and traders selling their positions after the ETFs were approved — confirming a “buy the rumor, sell the news” event. Additionally, whales have been securing profits on their holdings after 12 months of gains.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
U.S. non-farm payrolls surge by 165,000 in October, far exceeding expectations! Unemployment rate unexpectedly drops to 4.1%, December rate hike expectations intensify
In October, US non-farm payrolls increased by 165,000, which is 2.5 times the Wall Street median forecast of 65,000 and represents an exceptionally strong deviation of about 5 standard deviations, exceeding the upper limit of all institutional forecast ranges. The unemployment rate unexpectedly fell from 4.2% to 4.1%, while the market had expected it to remain unchanged; average hourly wages also accelerated year-on-year growth to 3.1%. Meanwhile, the previous two months' non-farm payrolls were revised upwards by a total of 84,000. Following the release of the data, the yield on 2-year US Treasury bonds rose by 7 basis points, and the pricing of the probability of a Fed rate hike in December climbed to 70%.
AI Sell-off Hits Anthropic IPO, Potential Valuation Expected to Drop to $1.2–1.3 Trillion
The valuation range discussed by potential investors has been lowered from the previous high of $2 trillion to between $1.2 trillion and $1.3 trillion, and some strategists have even suggested going below $1 trillion to ensure safety. In the face of significant market volatility and financial concerns such as quarterly losses, Anthropic is facing tough decisions, including a discounted valuation, reducing the size of the offering, or postponing the listing.
Moderna Q3 revenue up 29% year-on-year, far exceeding expectations, raises full-year revenue growth guidance to 15%-25% | Earnings Report Insight
Moderna's Q3 revenue increased by 29% year-on-year to $1.31 billion, with profits significantly exceeding expectations. The company raised its 2026 revenue growth guidance to 15%-25%. The ramp-up of next-generation COVID-19 and flu vaccines, along with international market expansion, has driven performance improvement. Phase III data for the personalized cancer vaccine has also shown positive progress. The company is simultaneously advancing cost reduction and pipeline R&D, with year-end cash expectations significantly raised.
Crypto prices
More
