Analysts and investors are wondering what could have triggered this decline in prices after the numerous bullish forecasts and the prevailing optimism in the market.
Cryptocurrencies regain ground this Thursday after a turbulent previous day for digital assets. Bitcoin (BTC), which recently hit a 21-month high and was close to US$46,000, it is now trading below US$43,000, after having fallen below US$41,000 in the last 24 hours.
Meanwhile, Ethereum (ETH) registered an even greater drop in the last day, being on the verge of losing US$2,100, although it is currently slightly above US$2,200.
The rest of the ‘altcoins’ have followed a similar pattern. The consolidation moves seen at the start of Wednesday were followed by a sharp drop around midday, with tokens such as solana (SOL) losing almost 9% in the last 24 hours and falling back below $100. Others such as XRP, cardano (ADA), avalanche (AVAX), dogecoin (DOGE), polkadot (DOT) or polygon (MATIC) have suffered drops of more than 8%, and in some cases they have even exceeded 10%.
Analysts and investors wonder what could have triggered this decline in prices after the numerous bullish forecasts and the prevailing optimism in the market. An accepted answer among some experts has been that precisely this excess of optimism has been the main trigger for this setback.
Bitcoin: the data analyzed by the market
Digital asset research firm CryptoQuant attributed the drop to exceptionally high funding rates in the Bitcoin futures market, added to the decline of bitcoin miners and other cryptocurrency companies on the stock market, as well as the high profit rates of short-term holders, as other factors that supported this decline. These experts, who predict that bitcoin will break its all-time highs this year, point out that the approval of spot BTC exchange-traded funds (ETFs) could generate a “buy the rumors, sell the news” scenario. , putting downward pressure on cryptocurrency prices before propelling it to never-before-seen heights.
Along these lines, the Securities and Exchange Commission (SEC)) held a meeting yesterday with some of the main American stock exchanges such as NYSE, Nasdaq or CBOE to finalize some details for their final decision on the ETFs. According to experts such as Eric Balchunas, senior exchange-traded fund analyst at Bloomberg, these meetings could suggest that the regulator is in favor of approving these funds. On the other hand, some US media have reported that, like JP Morgan, Goldman Sachs could be one of BlackRock’s main partners in its spot ETF.
Despite this, there are still skepticism about the possible approval. Yesterday, heDigital asset investment firm Matrixport published a report that contradicted its previous stance, claiming that the SEC would reject spot bitcoin exchange-traded funds.. Previously, the Singapore-based company claimed that the regulator would approve these investment products and that the reigning cryptocurrency would quickly skyrocket towards $50,000.
Source: Ambito
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