Bitcoin Price Drops to $42,000, Altcoins Face Selling Pressure

On December 26, Bitcoin (BTC) price experienced a downward movement, reaching $42,200, down 2% for the day and marking its lowest point in almost a week. Analysts attributed this decline to seasonal trends affecting BTC prices.

Despite the expectation of a “Santa rally” or holiday surprise, Bitcoin bulls were met with continued market struggles over the Christmas period. Material Indicators, a trading resource, commented that the concluding days of 2023 were likely to pose challenges for Bitcoin’s price dynamics. Material Indicators noted:

“Year end profit taking and tax loss harvesting are going to strengthen the headwind for BTC bulls. Watching to see if they can reclaim the 21-Day MA before tonight’s D candle close.”

They also pointed to Bitcoin’s 21-day simple moving average, which, at the time of writing, was at $43,115, approximately $400 higher than the current spot price. Bitcoin has, however, contained a drop above $42,000. Traders are assessing how investors would react when the Bitcoin ETF approval comes on January 10.

One critical question revolves around whether the actual approval of spot Bitcoin ETFs will lead to profit-taking, adhering to the market adage of “buy the rumor and sell the news.” In simpler terms, the level of interest in the anticipated spot Bitcoin ETFs from entities like BlackRock Inc. and Fidelity Investments remains uncertain.

Nic Carter, the founding partner at Castle Island Management LLC, expressed on Bloomberg Television that the market is “almost certain” the U.S. Securities & Exchange Commission will grant permission for spot Bitcoin ETFs before January 10. While he anticipates these funds will attract a broader base of crypto investors in the medium term, Carter also noted the potential for a “news selling event” in the immediate period.

Altcoins Follow the Cue

After reaching the $100 threshold during the weekend, Solana has experienced a mild retreat. Currently, SOL is priced at $109.20, reflecting an 11% decrease in the last 24 hours. It’s worth noting that Solana has successfully maintained a position above $100 since surpassing this milestone on Saturday. This uptrend aligns with a favorable overall trend in the cryptocurrency market, establishing Solana as the fourth-largest crypto asset based on market capitalization.

Ripple’s native cryptocurrency XRP is also facing correction and is down by 4%. Similarly, Avalanche’s AVAX is also down by 9% in the last 24 hours. On the other hand, Binance Coin (BNB) and Polygon (MATIC) defy the broader market correction gaining 10% each.

The Solana-based meme coin BONK has maintained its position within the top 100 assets, although it has experienced a slight decline from its peak at 69. BONK achieved an all-time high following its listing on Coinbase. Despite its rapid ascent, BONK remains a highly volatile meme coin, currently priced at $0.00001615, reflecting a 15% decrease in the last 24 hours.