Why is Bitcoin Declining after the Approval of ETF ?

It's no news that the US securities and exchange commission SEC approved bitcoin Etf on the 10th of January. Before this approval, most investors and traders were speculating that if the bitcoin Etf is accepted, bitcoin price will rise to $55 but if it's rejected, bitcoin price will dump to $38k and it was on $44k before the approval. So on the day it was approved, people actually waited for it to be traded the next day. To most people's surprise, bitcoin price reduced on the first ETF Trading day.

People weren't expecting such dump as they were expecting a pump bit it wasn't coming the way they had speculated or predicted. Normally, it's a thing of joy for bitcoin Etf to be approved by the SEC and one factor that Increases the price of Steem is regulatory or institutional financial personnel accepting bitcoin as a form of payment and can be traded as well without extremely placing restrictions. So with this, investors expected something huge but it was otherwise. What's the reason for this reduction?

The approval of Bitcoin by security and exchange Commission in US spark considerable interest in the crypto ecosystem. But it's surprising to actually see how there's a sharp decline in the price of Bitcoin after they approval the following factors or reasons actually justifies this.

• one of such major reason is profit taking which is a common practice by crypto Traders and investors In The crypto market. They were number of investors portrayed as who actually enter the market anticipating they approval so as to be in so much profit during the first trade of the ETF. So those who entered the trade my choose to sell their bitcoin Holdings after they approval is granted to lock in profit and when such selling pressure which is actually a decrease in demand occurs, there is a sharp tendency that bitcoin price will reduce of which it is doing so. One factor that determines the change in price of Bitcoin or any other crypto assets is demand and supply. The higher the demand the lower the quantity. When did the man out strips the supply of Bitcoin, there's going to be a decline. So this is one major reasons why it's reducing in price.

• Asides this, the market was already priced in and after its approval, the crypto whales in the market took the opportunity to sell their holding in a candle above $49k. So this sell pressure brought about the decline in bitcoin price to as low as $40k.

• Another possible reason or factor that contributed to this decline is uncertainties in the implementation and operation of the ETF as some investors fear the regulatory development which may impact the market negatively. So they going to selling their position. And this is exactly what happened some days ago.

• when bitcoin ETF was approved, majority had this expectation that the price of Bitcoin will skyrockets to an uptrend but their expectations were not fully met after all the hype. The followed approval of bitcoin brought about increased buying activity by traders and investors with the hopes that the they'll gain profits once the bitcoin Etf is approved. So seeing an unexpected decline made investors move psychologically so their Holdings won't be affected. Due to this, most Traders and investors went in the pressure to sell their positions which resulted in a change in market sentiment.

• Traders who rely on technical analysis that identifies key support and resistance levels will actually know when the price of bitcoin reaches a significant resistance level which may lead to a sell signal and probably cause a decline in the price of bitcoin as it is doing so. Some traders choose to engage in short-term trades as the market is not moving for bitcoin as expected.

Prior to what I said about the whales, in crypto such activity of selling at a particular candle is called Using the retails money as your exit liquidity. So these are some factors that contribute to the decline of bitcoin price.

All screenshots are from my binance and twitter handle

Disclaimer :Any financial and crypto market information provided in this post was written for informational purposes only and does not constitute 100% investment advice. It's just basic knowledge every crypto trader or investor should have