Bitcoin drops below $39k while South Korea doubts whether to allow an ETF

Bitcoin looks for a support line as the ‘sell the news’ decline (which was forecasted to happen) has already exceeded 20% since January 11. This morning, the largest digital coin fell below $39k for the first time in two months.

Many crypto fans believe that big companies like Blackrock bought in at levels between $25 and $30k last summer and are now trying to shake off the smaller retail traders before we rise again.

Now that Bitcoin’s down about 20% from its high i expect a strong stand to be made but it won’t hold because not enough money is coming in. New theme: Number Go Down

— Jim Cramer (@jimcramer) January 23, 2024

The zone between $38,000 and $40,000 is very important for this hypothesis as most analysts have indicated in the past few days that they would buy in that level. Therefore, this week will be very interesting to see at what level major players are willing to buy in again. Will we see a bounce tomorrow? Will bottom fishers come scooping up coins like Ether and Solana?

Engine

It is sometimes said that Seoul is the growth engine for cryptocurrencies. The trading volume that coins like Bitcoin, Ether and Solana experience when South Koreans wake up cannot be compared to any other country. In December, South Korean investors managed to double the price of Bonk, Solana’s memecoin, in a single day.

Historically, South Korea’s Millennials have been the largest fan base for Bitcoin and crypto. Yet the government is hesitant to allow a Bitcoin ETF (exchange traded fund) like the United States, and there are very good reasons for this.

Elections

When Bitcoin rose to $20,000 for the first time in December 2017, many young people in South Korea went completely crazy for all new crypto coins. Some thought they would make fortunes but the government warned of Bitcoin’s volatility and advised them to sell as quickly as possible. Bitcoin became an official talking point for the South Korean government back then already.

Young people sold, the price of Bitcoin collapsed but many sold at a loss. These same young people saw that Bitcoin rose to $69,000 in 2022 and still blame their government for not HODLing at the time.

🇰🇷🔄 Breaking: #SouthKorea reevaluates its position on spot #Bitcoin ETFs. The shift comes after comments from Chief of Staff Sung Tae-yoon and an analysis by the Industrial Bank of Korea (#IBK). Regulatory adjustments might be on the horizon. #CryptoRegulation💹#BitcoinETF #ETF pic.twitter.com/uqtXfWgjk9

— Paweł Łaskarzewski (@PawelSynapse) January 20, 2024

However, because the South Korean government knows full well how much would be invested in Bitcoin if they too were to allow a Bitcoin ETF (just as the Americans did on January 10), they want to wait until after the April elections before deciding.

Analysts claim that the admission of a Bitcoin ETF in Seoul could double the price of Bitcoin this year.