Bitcoin (BTC) has suffered a significant price drop after reaching a new all-time high (ATH) of over $108,000.
At the time of writing, the price is around $95,300, which represents a decline of about 12%. However, this correction is seen as only temporary as the demand for BTC still exceeds what miners can produce.
Strong demand from ETFs supports price
In particular, the US Bitcoin Spot Exchange-Traded Funds (ETFs) play a crucial role in supporting the price. These funds withdrew a whopping 4,349.7 BTC this week, worth $423.6 million. This is almost double the 2,250 BTC produced by miners during the same period. According to the law of supply and demand, this should create upward pressure on the price.
In December alone, spot Bitcoin ETFs saw an impressive $5.5 billion inflows. Institutional investors are demonstrating their confidence in the long-term value of Bitcoin, contributing to the positive outlook for the digital currency.
Positive outlook in a broad bull market
The recent price decline therefore appears to be only a temporary correction within a broader bull market. While it may take some time for BTC to fully recover, crypto investors are likely of little concern.
Popular analysts such as Elja Boom and Rekt Capital have different expectations about the timing of a recovery. Boom expects Bitcoin to quickly rise above $100,000 again, while Rekt Capital predicts another week of consolidation could follow. One thing is certain: 2024 will remain a historic year for Bitcoin.
Social sentiment is at rock bottom, but there are positive signs
At the same time, blockchain analytics platform Santiment reports that social sentiment among retail investors has reached its lowest point in 2024. Interestingly enough, this could actually be a positive signal for investors. “Negative sentiment often points to a possible turnaround in the market,” Santiment said. This ties in with Warren Buffett’s famous words: “Be fearful when others are greedy, and be greedy when others are fearful.”
Conclusion
The current correction in the Bitcoin price is supported by strong demand from ETFs and institutional investors, indicating robust long-term value for the digital currency. Despite temporary declines, investor optimism remains high, with 2024 marking a potential historic recovery for Bitcoin.
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Source: https://newsbit.nl/bitcoin-koers-daalt-met-12-maar-crypto-investeerders-maken-zich-weinig-zorgen/
