Bitcoin's tumultuous trading sees a 7% decline, dipping below $41,000 after a December rally

Bitcoin's tumultuous trading sees a 7% decline, dipping below $41,000 after a December rally


  • Bitcoin Slides 7% on Monday Following $44,000 Peak Last Week, Reports Coinbase.
  • This drop follows a 12% surge in December, noted by Coin Metrics, fueled by rising anticipation of the U.S. potentially greenlighting its inaugural spot bitcoin ETF.
  • CoinGlass data reveals $119 million in long liquidations for bitcoin in the last 22 hours, with ether witnessing $99 million.

Bitcoin experienced a temporary decline on Monday as investors chose to capitalize on the gains from its impressive December surge. The cryptocurrency's value dipped by more than 7% to $40,887.81, according to Coinbase, following a significant drop on Sunday night that momentarily pushed it to a low of $40,300. Although Bitcoin had surpassed $44,000 just last week, it maintained a position just below that threshold over the weekend.

In parallel movements, Ether saw a 7% decrease to $2,202.92, Solana's SOL token dropped by 7%, and Ripple's XRP experienced an 8% decline. Coin Metrics reported that both Bitcoin and Ether are set for their most challenging days since August 18 and March 9, respectively.

Crypto-related stocks also faced a downturn, with Coinbase experiencing a 5% decrease, MicroStrategy losing 7%, and prominent Bitcoin miners Riot Platforms and Marathon Digital witnessing double-digit declines of 11% and 12%, respectively. Meanwhile, Wall Street favorites CleanSpark and Iris Energy were down nearly 15% and 14%, respectively.

These market shifts occurred following a 12% surge for Bitcoin in December, driven by growing expectations of the U.S. Securities and Exchange Commission approving the first spot Bitcoin exchange-traded fund in early January. Galaxy Digital estimates the potential market size of a U.S. Bitcoin ETF to be around $14 trillion in the first year post-launch, expanding to approximately $26 trillion in the second year.

Despite the recent pullback, industry experts, such as Wolfe Research's Rob Ginsberg, remain optimistic about Bitcoin's momentum, describing it as "red hot" and noting its fervent trading reminiscent of early 2021 when it reached its all-time high.

The decline triggered a surge in liquidations, with $146 million in long liquidations for Bitcoin and $100 million for Ether over the past 22 hours, according to CoinGlass. Ginsberg believes there is still substantial momentum in the current Bitcoin uptrend, and chart analysts suggest that the cryptocurrency would need to experience further declines for them to reconsider the rally's strength.

Looking ahead, a potential Bitcoin ETF is just one of several positive catalysts anticipated for the cryptocurrency in the coming year. While some investors eagerly await the ETF, others are optimistic about a price increase following the Bitcoin halving expected in spring 2024. Additionally, market participants are closely monitoring the Federal Reserve, especially this week with its final policy meeting of the year, for insights into the likelihood of rate cuts in 2024.