The cryptocurrency market is undergoing a significant correction today. Bitcoin (BTC), the largest crypto by market cap, has fallen 4.4% in the last 24 hours, by over 9% in the weekly charts, and more than 10% over the previous month. BTC has dropped below $39k for the first time since early December 2023.
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Ethereum (ETH) has faced a 6.8% correction in the daily charts and is down by over 12% over the last week. Moreover, the global cryptocurrency market cap has fallen by 4.8% in 24 hours and is currently at $1.6 trillion.
Why is the cryptocurrency market falling?
The current market correction could be due to the outflows from Grayscale’s BTC fund, GBTC. According to a recent report by JPMorgan, the outflows from Grayscale’s GBTC fund could add ‘further pressure on bitcoin prices over the coming weeks.‘
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According to reports, now-defunct cryptocurrency exchange FTX has sold 22 million GBTC shares, further adding to the sell pressure.
Prominent cryptocurrency analyst Ali says BTC’s price could fall to $32,700, a drop of over 16% from current levels.
The downtrend in the market began on Jan. 12, after the SEC (Securities and Exchange Commission) approved 11 spot BTC ETFs (Exchange Traded Funds). Investors began moving assets out from older BTC products, channeling them to the new SEC-approved BTC ETFs.
According to CoinShares’ latest fund flow report, Bitcoin (BTC) saw outflows of over $24 million in the previous week.
Additionally, investors are pricing lowered expectations of the US Federal Reserve cutting interest rates. With no sign of interest rate cuts on the horizon, investors may be weary of funneling money into riskier assets, such as cryptocurrencies.
However, BTC’s halving even in April may offer some cushion to the current scenario.