Is the ETF-Led Euphoria Waning?
Despite a surge in exchange-traded fund (ETF) inflows, the world's largest digital asset had a brief dip below $40,000 before closing above that level, down 4% from the previous day's close.
Ether, Solana, and Polkadot, which are smaller coins by market capitalization, also had difficulties.
Due to anticipation surrounding the eventual January 11 debut of the first US ETFs to own the token directly, Bitcoin gained 157% last year. Bets for a softer monetary policy also helped boost digital assets. Traders are now lowering their expectations for interest rate cuts and evaluating the amount of capital the ETFs draw.
A crypto diehard said: "It is typical for Bitcoin to have this kind of correction following a large surge."