Why did Bitcoin price dropped?

Unexpected turn of events: Bitcoin price drops under 40k again

At the end of last year, Bitcoin made a lot of waves with the sudden rise and other events involving the booming of cryptocurrency. It reached a record price, and people only predicted a great year for this cryptocurrency. The beginning of this year has been as chaotic as the end of last year. However, the rollercoaster is not as positive as it was.

Bitcoin did not have a great start to the year. It stopped by one percent last week, and it could not catch a positive wave from the S&P 500. Experts said that Bitcoin price should not drop and that the recent jump to the highest highs is the one to stay^[1].

This is not coming true, however. Bitcoin’s value hit a low of $39,494, bringing its market cap down to $784.8 billion, and it traded $30 billion in the last 24 hours. It slightly bounced back and reached 40k again, but the price swings between 39 and 41 thousand dollars per Bitcoin.

Cryptocurrency holders have their goosebumps across the body once those prices dip low. Investors and traders follow these changes and have some chilling moments too.

What happened to Bitcoin: Is ETF's approval to blame?

A major reason for this drop is a lot of money being taken out of Bitcoin exchange-traded funds (ETFs). For instance, the Grayscale Bitcoin Trust lost a huge $640 million in just one day. This is part of a larger amount of $3.45 billion that was left recently.

Experts like James Seyffart and Holger Zschaepitz say that people are quickly taking their money out of Bitcoin ETFs. They also say that people are not as interested in these ETFs anymore. This lack of interest is causing the price of Bitcoin to go down.

Some people have different views on this situation. Peter Schiff, who often speaks against Bitcoin, has been saying for a while that ETFs related to Bitcoin are not as great as people say. He points out that the ProShares Bitcoin Strategy ETF, for example, lost more than half of its value since it began in October 2021^[2].

He believes other ETFs will have similar problems. On the other hand, Jim Cramer simply says, "Bitcoin is tough to own." He had earlier predicted that Bitcoin would face difficulties.

The future is still full of surprises

The world of cryptocurrencies is always full of chaos, changes, and surprises. Even with these ups and downs, many investors still believe in Bitcoin. This is shown by the Fear & Greed index, which is at 55 (Greed). This number is considered good and shows that people still have confidence in Bitcoin.

Looking at Bitcoin’s performance in the last 30 days, it has not been doing well. It lost 8.60% of its value. However, if we look back a few months or a year, it has gone up by 18.71% and 74.82%, respectively. But the future prediction for the next five days is not positive, expecting a drop of about 10.86% to $36,435.

There's talk that its value could drop by 10.86% in the next five days, going down to about $36,435. This means that people who have invested in Bitcoin should pay close attention to what's happening.

To understand what might happen, it's important to watch certain things. These include the mood of the investors, the levels at which people start buying (support) or selling (resistance) Bitcoin, and other signs that show how Bitcoin is doing^[3].

One big thing to remember is that cryptocurrencies are unpredictable. Even Bitcoin, which is one of the biggest and most known digital currencies, can have moments when its value changes a lot, either going up or down quickly. For people who put their money into Bitcoin, this can be a bit scary. But it's also a normal part of how cryptocurrencies work.

It's clear that Bitcoin's journey is full of ups and downs. People who are interested in Bitcoin, whether they are already investing in it or thinking about it, should stay informed and be ready for anything. The world of digital currencies is always changing, and what happens next with Bitcoin is something many are watching closely.