The US Securities and Exchange Commission made history in mid-January when it finally approved nearly a dozen spot BTC ETFs to launch on local exchanges after a decade of delays and rejections.
There was a big price run-up ahead of the approvals that resulted in a highly positive Q4 ’23 for BTC. However, the landscape changed on the day the ETFs launched in the US, and Bitcoin slumped by over ten grand in the following weeks. Has the asset finally bottomed?
The ETF Aftermath
All eyes in the financial world were on the US SEC at the start of the year, with multiple experts claiming that the regulator will finally allow spot Bitcoin ETFs in the country. As such, the anticipation led to a massive increase in BTC’s price, which soared past $40,000 for the first time in nearly two years.
The experts turned out to be correct, and the US watchdog greenlighted 11 such products on January 10, and they went live for trading on the next day amid record-setting volumes.
Bitcoin’s price reacted well at first and shot up to over $49,000 hours after the US exchanges opened on that Thursday, but the landscape changed later on. After an immediate retracement of over seven grand, BTC kept dumping and bottomed at $38,500 last Thursday. As such, the asset had lost more than ten grand in two weeks.
Since then, BTC’s price performance has been a lot less volatile but still positive, and the cryptocurrency currently stands at around $43,000. Thus, it has erased almost all losses induced after the ETF approvals.
The Botton Was Reached?
After this substantial decline, the community started speculating on whether the asset had indeed reached its post-ETF bottom as those approvals became a sell-the-news moment. Data from Santiment shows that this might be the case, especially when we compare social discussions.
They shot up in the second half of 2023 when the anticipation for the ETFs was on a high note, which led to a gradual increase in the greed factor. However, three weeks after the launch of the ETFs, Santiment said this indicator “has finally normalized,” suggesting that BTC’s price has gone through the post-approval volatility and could be preparing for the next big event of 2024 – the halving.
🥳 Historically, a high ratio of crowd discussions toward #Bitcoin is a sign of fear. However, since mid-2023, the euphoria & optimism surrounding the #ETF‘s has flipped high $BTC discussions into a greed indicator due to (arguably) unrealistic expectations for
(Cont) 👇 pic.twitter.com/CVf9nm1r04
— Santiment (@santimentfeed) February 2, 2024
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