Bitcoin Traders Eye Support at $40K as ETF Contrarian Bets Prove Right

The approval of spot bitcoin ETFs in the U.S. was much anticipated and well-priced, so the event will likely be a short- to mid-term top for the price, analysts said.

AccessTimeIconJan 15, 2024 at 11:08 a.m. UTC
Updated Mar 8, 2024 at 7:58 p.m. UTC

Bitcoin (BTC) contrarian bets were seemingly proven right as the much-awaited approval of a spot exchange-traded fund (ETF) turned out to be a “sell-the-news” event, one that analysts previously warned was possible given the token’s rapid price appreciation in the past months.

“Sell the news” is a well-known term in capital markets and describes how asset prices, leverage and sentiment run-up in the lead-up to a bullish event, only for prices to tumble shortly after.

BTC pulled back to as low as $41,500 early Monday, before recovering, after briefly hitting its two-year high above $49,000 as the first-ever spot bitcoin ETFs in the U.S. started trading last Thursday.

The approval of spot bitcoin ETFs in the U.S. was much anticipated and well priced, so the event will likely be a short- to mid-term top for the price, analysts at Japan-based crypto exchange bitBank told CoinDesk in an email.

“Bitcoin could be vulnerable to profit-taking selling pressures in the short term, but given lower U.S. treasury yields and the market’s optimistic outlook for the Fed’s early rate cuts, its downside risk may be limited,” they added.

bitBank said it considered the $40,000 psychological level as a support for bitcoin prices in the near term. Elsewhere, analysts at 10x Research, led by Markus Thielen, said in a Monday note that they expected prices to find support at as low as $38,000.

Meanwhile, FxPro market analyst Alex Kuptsikevich told CoinDesk in a Monday email that a correction to at least $40,000 per bitcoin would be “within bounds of typical corrections,” given the cryptocurrency’s price performance of over 150% over 2023.

As such, long-term expectations for bitcoin remain largely bullish, given the apparent demand for ETFs, as volumes indicate, among institutional players.

“Bitcoin ETFs will be transformative for the industry, allowing for vastly greater access from traditional wealth management - their launch will bring new investment into bitcoin from pensions, endowments, insurance companies, sovereign wealth, retirement plans, trusts, and many more,” shared Henry Robinson, founder at crypto fund Decimal Digital Group, in an email to CoinDesk.

“However, while the ETF launches are exciting, we think they offer no advantage over self-custody. For long-term holders, the fee emissions will bleed a position substantially. It may take many years, but we expect demand for ETFs to dwindle as bitcoin adoption rises and self-custody becomes more common among institutions,” Robinson added.

Edited by Parikshit Mishra.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Shaurya Malwa

Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.

Read more about