Bitcoin slides back to $40,000 as post-ETF correction deepens

Cryptocurrencies tumbled on Thursday, with bitcoin falling back to $40,000.

Bitcoin last traded lower by 3.6% at $41,167.14, according to Coin Metrics. Earlier, it fell as far down as $40,601.37, its lowest level since Dec. 18. Ether, which has gotten a boost in recent days while bitcoin struggled, fell too. It was last down 3% at $2,448.41. The rest of the crypto market broadly dragged with them.

The move in bitcoin weighed on crypto-related stocks, too. Coinbase and Microstrategy ended the trading day down by 7% and 2%, respectively. Miners CleanSpark and Marathon Digital lost more than 6% each, while Riot Platforms fell 5% and Iris Energy retreated 8%.

“We are still in the correction post-ETF launch,” said Julio Moreno, head of research at crypto data provider CryptoQuant.

“Short-term traders and large bitcoin holders are still doing significant selling in a context of a risk-off attitude,” he added. “Additionally, unrealized profit margins have not fallen enough for sellers to be exhausted.”

The unrealized profit of short-term holders has fallen to about 16% this week from 48% in December, but may need to fall below 0% to officially call a bottom in the price of bitcoin, Moreno added.

Furthermore, bitcoin flows to derivative exchanges have stopped growing, he said – a trend that has previously signaled bear markets or price corrections.

Bitcoin has now fallen about 12% since the U.S. Securities and Exchange Commission gave bitcoin ETFs the green light to begin trading in the U.S. on Jan. 10. Charts analysts have warned that although its long-term uptrend remains intact, it likely still has further to fall. Wolfe’s Rob Ginsberg said it could be just the beginning of a disappointing first quarter of the year.

Moreno previously projected that the post-ETF decision correction could pull bitcoin to as low as $36,000.

The cryptocurrency is down about 3% this year. It ended 2023 up 157%.

—CNBC’s Gina Francolla contributed reporting

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