Crypto News Today: BTC Slides Below $40,000, with ETH in Tow

Key Insights:

• BTC slid by 4.89% on Monday, ending the session at $39,572.
• BTC-spot ETF volumes remain below day 1 and 2 levels.
• On Tuesday, BTC-spot ETF, US lawmaker chatter, and SEC activity warrant investor attention.

Bitcoin Dives Below $40,000 for the First Time Since December 4

BTC slid by 4.89% on Monday. Following a 0.32% loss on Sunday, BTC ended the day at $39,572. Significantly, BTC fell below the $40,000 handle for the first time since December 4.

BTC-Spot-ETF Trading Volumes Fail to Impress Investors

On Monday, Bloomberg Intelligence Analyst James Seyffart shared day seven trading volumes for the Nine. Excluding Grayscale, Fidelity Wise Origin Bitcoin Fund (FBTC) saw higher trading volumes than the iShares Bitcoin Trust (IBIT) for the second consecutive session. However, trading volumes ex Grayscale GBTC were lower than on day six and well below volumes on days 1 and 2.

The pullback in trading volumes impacted buyer demand for BTC. Significantly, profit-taking from BTC gains in response to the SEC approving the BTC-spot ETFs overshadowed the influence of new money from the spot ETF market.

Bitcoin Fear & Greed Index Turns Neutral

The Bitcoin Fear & Greed Index returned to the Neutral zone on Tuesday, falling from 55 to 50. Significantly, the Index declined for the second consecutive session and fell to the border of the Fear zone. On January 11, the Fear & Greed Index entered the Extreme Greed zone, peaking at 76.

The return to the Neutral zone aligned with BTC price trends, with investors locking in profits after the SEC approved the first batch of BTC-spot ETFs. Comments from SEC Chair Gensler after the approvals may have contributed to the BTC retreat. On January 11, Gensler warned,

“Importantly, today’s Commission action is cabined to ETPs holding one non-security commodity, bitcoin. It should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities.”

SEC Chair Gary Gensler dashed hopes of the SEC approving ETH-spot ETFs and altcoin-spot ETFs soon. Last week, the SEC delayed approving a Fidelity ETH-spot ETF application.

Ethereum (ETH) continued to retreat, sliding by 5.89% on Tuesday. ETH ended the session at $2,312. Investors continued to reduce bets on the SEC approving ETH-spot ETFs.

Technical Analysis

Bitcoin Analysis

BTC sat below the 50-day EMA while remaining above the 200-day EMA. The EMAs sent bearish near-term but bullish longer-term price signals.

A BTC break above the $39,861 resistance level would support a move to the 50-day EMA. A breakout from the 50-day EMA would give the bulls a run at the $42,968 resistance level.

On Tuesday, investors must consider US lawmaker chatter, SEC v crypto case-related news, and BTC-spot ETF-related updates.

However, a fall through the $39,000 handle would bring the $37,986 support level into play.

The 14-Daily RSI reading, 37.14, suggests a BTC fall below the $39,000 handle before entering oversold territory.

Ethereum Analysis

ETH held above the 50-day and 200-day EMAs, sending bullish price signals.

An ETH return to the $2,400 handle would support a move to the $2,457 resistance level. A breakout from the $2,457 resistance level would bring the $2,650 resistance level into view.

Investor sentiment toward the SEC approving ETH-spot ETFs remains a consideration.

However, a break below the 50-day EMA would give the bears a run at the $2,143 support level.

The 14-period Daily RSI at 45.43 indicates an ETH fall through the $2,200 handle before entering oversold territory.