Bitcoin price dips as US stocks pull back

Quick Take

  • Bitcoin has dipped by almost 2% over the past 24 hours, with U.S. stocks opening lower on Monday.
  • The pullback comes after four straight positive weeks for major equity indices.

Bitcoin BTC +0.65% has started the week off in a subdued state, with its price falling almost 2% over the past 24 hours and dipping below $37,000. 

The world's largest digital asset by market capitalization slipped alongside stocks on Wall Street, marking a reversal of conditions that have prevailed over the past month. Within the first hour of early-day trading on Monday, the Dow Jones had declined 0.1%, the S&P 500 decreased 0.3%, and the Nasdaq declined 0.3%.

Investor caution in traditional markets

Analysts anticipate that after the recent gains in traditional markets, cautious investors will seek profits, prompting a retracement from the elevated positions observed in November.  

According to ETC Group Head of Research André Dragosch, these macro-related catalysts could exert downside pressure on bitcoin in the short term. "Barring any short-term approval of a spot bitcoin ETF in the U.S., we still think that a short-term pull-back appears quite likely," Dragosch told The Block.

However, he added that "buyer exhaustion" should also be taken into account when analyzing current market trends. "Global ETP flows have just reached their highest level year-to-date. The only investors that appear to be underexposed are global crypto hedge funds based on their most recent performance sensitivity to bitcoin," the ETC Group Head of Research added.

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Bullish factors for 2024

Dragosch stressed that a short-term pullback for bitcoin could be followed by a bullish 2024. He listed a confluence of bullish on-chain and macro factors that could impact markets in 2024.

"Likely spot ETF approvals, bitcoin halving, potential U.S. recession with a reversal in U.S. monetary policy just to name a few," he added.

Bitcoin was trading at $36,934 at 10:41 a.m. ET, according to The Block data


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© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Brian McGleenon is a UK-based markets reporter for The Block. He has worked as a financial journalist and producer for multiple news outlets over the years, such as Fuji Television, The Independent, Yahoo Finance, The Evening Standard, and The Daily Express. Brian is also a screenwriter and producer with one feature film produced and one in development with Northern Ireland Screen. Apart from web3 and cryptocurrency developments, he is also interested in geopolitics, environmental issues, artificial intelligence, and longevity research. Get in touch via email [email protected].

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