What are the most important factors that influenced and contributed to the decline in the price of Bitcoin in January?
The price of Bitcoin has witnessed high volatility since entering the new year 2024.
The price of Bitcoin reached a level that it had not reached for several months. It also fell below the level of $40,000, then recovered it in the past hours and remained trading above it at the time of writing this article.
In this article, we will go to extremes and try to answer the article’s question:
What are the most important factors that influenced and contributed to the decline in the price of Bitcoin in January?
the answer:
Impact of ETFs and Market Correction:
After a period of sustained rally driven by positive expectations around the US Securities and Exchange Commission's approval of Bitcoin ETFs, the market has seen a natural correction.
This decline came as a result of the market being saturated after a long period of optimism.
Behaviors of short-term traders:
Short-term traders contributed to this decline, inflating prices before Bitcoin ETF approvals were announced, then quickly taking their profits in what is known as a “buy the rumor, sell the news” strategy.
The macroeconomic environment and its impact:
The third and final factor relates to changes in the macroeconomic context.
The improvement of the US dollar after a period of weakness negatively affected investor sentiment towards Bitcoin and contributed to the bearish outlook for the digital currency in January.
In short, it can be said that these are the main factors that contributed to the decline in the price of Bitcoin in January.
It is worth noting that Bitcoin is awaiting an important date that is expected to occur next April, which is the Bitcoin mining reward split event, which is positive news and its positivity is likely to be reflected in the price, which is what we have become accustomed to historically.
Decentralized trading platform Jupiter dethrones Uniswap and becomes first in terms of trading volume
In an exciting and eye-catching development, the Jupiter decentralized trading platform, which runs on the Solana blockchain, has exceeded the total trading volume of both the Uniswap V2 and V3 protocols, with the trading value on the platform reaching $480 million during the past 24 hours.
This sudden increase in activity is believed to be due to the excitement surrounding the launch of the new meme coin Jupiter and the rise in stablecoin trading.
Jupiter's trading volume exceeded that of Uniswap, the latter's Ethereum platform, which recorded $470 million in the same period.
At the heart of these market changes is the “Wen” meme coin that has been distributed via Airdrop to every Solana user who has interacted with Jupiter over the past six months, as well as to owners of Solana (Saga) phones.
The “Wen” digital currency was developed as an experiment by the “Jupiter” developers before the upcoming launch of the “JUP” digital currency, which is the official currency of the platform and is scheduled to be launched on January 31.
While the “Wen” meme contributed about $50 million to Jupiter’s daily trading volume, the largest percentage of trading traffic came from exchanging Solana (SOL) with stablecoins USDC and USDT, where it accounted for $191 million of the total volume.
The success of the “Jupiter” platform and its superiority in trading volume shows us the importance and popularity of Solana as a leading blockchain platform in addition to the growing reliance on decentralized trading platforms.
The impending airdrop of the JUP cryptocurrency has also increased interest in the Jupiter platform, attracting both individual and institutional investors.
The excitement surrounding the launch of the digital currency JUP reflected positively and increased interest in the decentralized trading platform “Jupiter” and also demonstrated the effectiveness of airdrop operations within the cryptocurrency ecosystem.
Poll: 73% of Europeans are confident about the future of cryptocurrencies
Recently, a survey conducted by Binance - which is the largest cryptocurrency trading platform in the world - showed that a large percentage of the European population, estimated at 73%, have positive expectations regarding the future of the cryptocurrency sector.
The survey included users from France, Italy, Spain, and Sweden, and indicated an increasing trend towards trust in digital assets and growing adoption.
The results indicate a clear tendency towards optimism towards cryptocurrencies, with many respondents preferring to participate exclusively in the crypto sector.
The survey found that 55% of participants interact exclusively with cryptocurrencies, which reflects the positive outlook towards future growth and confidence in crypto and blockchain technologies on their part.
In addition, about 24% of participants reported that more than half of their trades involve cryptocurrencies.
Regarding the main uses of digital assets, 34% of respondents mentioned using them for long-term trading, while 26% of them use cryptocurrencies for savings purposes, 13% for day trading, and 9% for purchases.
55% of participants indicated that they use cryptocurrencies for daily purchases, and 10% purchase cryptocurrencies weekly.
According to the same survey, the main drivers behind the increasing adoption of cryptocurrencies in Europe are the desire to achieve high financial returns, the attractiveness of decentralization and financial independence, and technological innovation.
This was acknowledged by 20%, 18%, and 17% of participants, respectively.
More than 82% of participants confirmed their involvement in cryptocurrencies for more than a year, with 73% remaining active over the past five years and 9% participating for more than five years.
Only 5% joined this field in the last six months.
As for trading, 53% of survey respondents are active traders, and most of them prefer monthly trading.
While about 65% prefer to use central exchange wallets, compared to 18% who use hardware wallets.
Rachel Conlan, Marketing Director at Binance, commented on these results by saying:
The increasing use of cryptocurrencies in everyday purchases and the diversity of their applications highlights the importance of integrating digital assets into our daily lives.
As Europe moves towards implementing a secure and harmonized regulatory framework for the industry through MiCA, the region is demonstrating its leadership in supporting the mainstream adoption of digital assets.
The crypto community is awaiting Charles Schwab’s entry into the Bitcoin ETF market!
Charles Schwab, an entity and a prestigious name in the financial market, is preparing to enter the Bitcoin ETF sector, in a move that comes relatively late.
This move comes in light of the significant increase in trading volumes in the US market, where Bitcoin traded funds recorded trades totaling $25.36 billion during a period of only 11 days.
Now, industry professionals are watching Schwab closely, anticipating that its entry will contribute to creating a new competitive environment in the market.
The strategy followed by Charles Schwab towards the Bitcoin ETF is characterized by caution and caution, as the company did not rely on being proactive in breaking into new markets, but rather preferred to follow a calculated approach that focuses on long-term value at the expense of immediate impact.
This policy may change the rules of the game in the Bitcoin ETF market, as the company is expected to exploit its great influence and strong reputation for competitive pricing.
In addition, its strong customer base and low fee policy may contribute significantly to changing market dynamics.
Financial analyzes and forecasts presented by experts such as Eric Balchunas from Bloomberg and Nate Geraci, a specialist in ETF funds, have raised the possibility of Schwab offering a strong competitive product that may challenge the current offerings in the market.
Many expect Schwab to announce an exchange-traded fund with lower management fees, which could put pressure on existing competitors and attract a broad base of price-conscious investors.
So far, Charles Schwab has not officially confirmed its plans for a Bitcoin ETF, leading to growing speculation and excitement in financial circles.
Accordingly, the financial community in general and the crypto community in particular are awaiting the official Schwab announcement.
The entry of a company the size and weight of Charles Schwab, known for its strategic steps and sophisticated financial products, could change the features of the market for investment options in encrypted digital currencies, especially the Bitcoin exchange-traded funds sector on the stock exchange.
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