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What's Up with Crypto Today? Market Overview - January 5, 2024

The market is consolidating before the impactful ETF decision

Across the cryptocurrency market and the community, the spotlight is currently on the impending decision from the U.S. Securities and Exchange Commission (SEC) regarding the approval of a spot Bitcoin ETF, scheduled for January 10. A positive decision could fuel a market rally, whereas a delay or a negative decision might trigger a more profound correction than the one witnessed over the last nine days. Bitcoin (BTC) and Ethereum (ETH) are two cryptocurrencies that will experience the most significant impact of the SEC decision, as exchange-traded funds are directly associated with them. 


Crypto Heatmap. Source: Coin360

Throughout December, the cryptocurrency market has been on a rollercoaster ride. However, sellers prevented the rally from maintaining the same pace witnessed in November, resulting in a bearish bias that could be exacerbated should the SEC choose to delay or reject the Bitcoin and Ethereum ETFs. 

Despite a recent correction that saw an average 10% dip in cryptocurrency prices, the overall sentiment among investors remains bullish. The Fear & Greed index currently stands at 72, showing an increase from last week's 65, indicating sustained optimism in the market. This resilience suggests that despite fluctuations, there is confidence in the potential for a positive turnaround.

In the last 24 hours, the total capitalization of the cryptocurrency market has experienced a 2.2% decline, currently standing at $1.66 trillion, down from the previous $1.7 trillion. The recent decline in market capitalization may suggest the possibility of a more profound correction, particularly given that the overwhelming majority of the market, accounting for 83%, is currently in the red. 


Altcoin Index. Source: Blockchaincenter

The Altcoin Season Index currently stands at 59, reflecting a decline from nearly 70, which coincides with the rise in Bitcoin dominance to 51.64%. This shift may once again be attributed to the anticipation and impact of the upcoming ETF decision on market dynamics. The crypto market is poised to wait in anticipation until the regulator makes a decision. Meanwhile, behind the scenes, institutional investors are discreetly acquiring BTC and ETH through OTC desks, hinting at a potential significant rally if the ETF is approved.