Three Reasons Why Bitcoin Price Fell In January

Bitcoin price roared 160% higher in 2023 over a year-long rally with a year-end surge on ETF mania. But the price fell in January and here’s why.

In short, an overbought market after months of increasing certainty about the SEC’s Bitcoin ETF approvals burst in January and allowed the price to correct some.

During this time, short-term traders helped pump the price, then went ahead and took profits after the Bitcoin ETF approvals by “selling the news.”

Finally, tougher macro conditions, with a stronger dollar after a months-long slump, have led to more bearish sentiment for Bitcoin’s overall outlook in January.

Here are some more details:

Overbought Market On Bitcoin ETF News

The cryptocurrency industry was ecstatic after a D.C. Circuit Court of Appeals ruled in favor of Grayscale last August. The crypto hedge fund’s lawsuit alleged that the SEC’s decision to reject its Bitcoin ETF proposal was arbitrary and capricious.

The judge ordered the SEC to make a good-faith effort to approve an ETF. After that, Bitcoin price really began to heat up in October.

Week after week of new headlines with updates about the progress between over a dozen ETF applicants and the SEC kept pushing Bitcoin higher. The average exchange rate on crypto exchanges soared 80% in just a little over four months from $25,811 on Sept. 1 to $46,670 on Jan. 10. The average annualized ROI for that would be well over 200%. As JP Morgan predicted, the price had to cool.

Profit Taking By Short-Term Bitcoin Price Traders

Some Bitcoin investors follow a long-term strategy of accumulating and holding without selling. They are highly convinced that the upside left in cryptocurrency’s global adoption curve is tremendous, and they are loathe to sell any of their holdings. But price arbitrage day traders were apt to take profits in January.

Antoni Trenchev, co-founder of crypto lender Nexo, says the falling Bitcoin price in January was an example of the “buy the rumor, sell the news”
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One expert predicted that the digital currency Bitcoin would rise to its highest level ever before the end of this year. The famous economist indicated that the price of Bitcoin might rise before the next halving, and then sales would occur after the expected halving, before the digital currency Bitcoin rose. Once again, it will reach its highest levels ever during the fourth quarter of 2024

Also, the famous analyst called for the need to understand the classic behavior of Bitcoin during the current year in which the expected halving process will occur, and the need to identify possible scenarios for the price movement of the cryptocurrency, and that if Bitcoin maintains its upward momentum with the support of increasing net positive flows to ETFs, it may The cryptocurrency rises to $48,000 or $49,000 ahead of the upcoming halving
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