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Crypto crash: Bitcoin drops below $40K as chatter quiets down

Crypto crash: Bitcoin drops below $40K as chatter quiets down

Despite the previous hype surrounding the approval of spot Bitcoin (BTC) exchange-traded funds (ETFs) that many expected would lead to new highs for the maiden cryptocurrency, its price has dropped below the important psychological level of $40,000, and discussions seem to be dying down.

Indeed, Bitcoin is currently trading in the $39.5k area, falling below the above price range for the first time since December 4, 2023, in what the crypto analytics platform Santiment referred to as a “bloodbath for most of the crypto sector” in an X post on January 22.

Furthermore, the platform has also recorded a decline of 35% in the amount of chatter toward the flagship decentralized finance (DeFi) asset and a 21% drop toward its runner-up, Ethereum (ETH), compared to the period before the ETF approval by the United States Securities and Exchange Commission (SEC).

Shrinking crypto prices and social volume. Source: Santiment

As the platform’s analysts further observed, the ‘fear, uncertainty, and doubt’ (‘FUD’) is “beginning to enter the picture” after the spot Bitcoin exchange-traded fund hype and increased investor interest, “which should create nice price bounce opportunities when it reaches its peak.”

Bitcoin price analysis

Meanwhile, Bitcoin was at press time changing hands at the price of $39,460, down 3.12% in the last 24 hours, in addition to dropping 7.61% across the previous seven days and losing 9.64% to its value over the past month, according to the most recent charts on January 23.

Bitcoin 7-day price chart. Source: Finbold

It is also worth mentioning that all Bitcoin ETF issuers except Grayscale have collectively purchased more than 86,320 BTC at an average price of $42,000 – a $3.63 billion investment – which could suggest a formation of the top for the price of the largest crypto asset by market capitalization.

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