Bitcoin and other cryptocurrencies saw a drop in value on Monday, signaling a potential end to the initial surge following the approval of exchange-traded funds tied to spot trading of Bitcoin.
Over the past 24 hours, Bitcoin experienced a 0.7% decrease, falling to $42,662. As a result, the leading cryptocurrency returned to its previous trading range of $42,000 to $44,000. Last week, when the Securities and Exchange Commission approved the first Bitcoin ETFs, Bitcoin briefly surpassed $49,000.
This decline in price aligns with analysts’ predictions that the approval would trigger a “sell the news” moment for Bitcoin. Now, the focus turns to how much profit-taking will impact the cryptocurrency’s impressive rally, which has seen its price more than double in the last 12 months.
Yuya Hasegawa, an analyst at crypto exchange Bitbank, wrote in a research note that Bitcoin is likely to consolidate this week, with the $40,000 psychological level serving as a potential support for the price.
In addition to these developments, the crypto sector faces another test as Coinbase Global, a prominent cryptocurrency exchange, seeks to have a lawsuit dismissed. The lawsuit was brought against the company by the SEC last year for allegedly offering and listing unregistered securities. Coinbase is currently acting as the custodian for eight Bitcoin ETFs that recently started trading.
Silver linings are scarce across the cryptocurrency market as Ether, the second-largest cryptocurrency, saw a 0.9% decrease, resting at $2,525. Other smaller cryptocurrencies experienced declines as well, including Solana (-2.1%), Cardano (-1.8%), and Dogecoin (-3.0%).