Altcoin sell-off causes turmoil ahead of ETF approval

Several altcoins are seeing sharp price drops at the beginning of the week, as data from Coingecko. Among the biggest losers were coins and tokens that had risen particularly sharply in recent months.

These include Near Protocol (NEAR), Bittensor (TAO) and Celestia (TIA), all of which corrected by ten percent or more within 24 hours.

In the top 10, Solana (SOL) fell below the $90 mark, while Cardano (ADA) corrected below $0.50 for the first time since early December. Only Bitcoin (BTC) and Ethereum (ETH) have held back so far, recording price losses of only one to 2.5 percent.

Today's altcoin sell-off comes in the week when experts expect a spot Bitcoin ETF is approved.

Therefore, in the absence of other negative headlines, many observers view the price declines as just another correction in the crypto market ahead of the long-awaited event. After all, many altcoins have risen in recent months without major losses.

For others, the beginning of a "sell the news event" threatens. They say the SEC's approval of a Bitcoin ETF is a temporary high point for Bitcoin and the broader altcoin market.

BlackRock, the largest asset manager in the race for an ETF, expects its application to be approved on Wednesday, Jan. 10. Although the event is seen as a catalyst for a new crypto bull market, it could lead to more profit-taking in the short term.

The altcoin sector was pushed up late last year by the positive sentiment surrounding several Bitcoin ETF filings. If there are no major inflows into the crypto sector due to an ETF approval, the first quarter of this year could be marked by further price declines.