Bitcoin experienced its most challenging streak in nearly a month as the initial excitement surrounding the launch of new U.S. exchange-traded funds (ETFs) for the leading digital asset faded away. The cryptocurrency fluctuated between gains and losses, ultimately settling at $42,655 on Monday, following a three-day decline – the longest losing streak since mid-December. Ethereum, the second-largest cryptocurrency, experienced a dip, while Binance Coin (BNB) saw upward momentum.

The recent debut of nearly a dozen ETFs, featuring major players such as BlackRock Inc. and Fidelity Investments, triggered a brief surge, propelling Bitcoin to a two-year high above $49,000. However, this enthusiasm was short-lived as the digital currency began a downward trajectory. Market analyst Tony Sycamore attributes this pattern to a classic "buy-the-rumor, sell-the-fact reaction," suggesting potential further declines to the $38,000-$40,000 range based on Bitcoin's chart patterns.

Advocates of Bitcoin as a store of value assert that the introduction of the first U.S. spot ETFs signals expanded investor access to the cryptocurrency. However, sceptics point to the crypto market's tumultuous 2022, marked by a significant crash and subsequent bankruptcies, urging caution despite a partial market recovery in the preceding year.

Bloomberg Intelligence's senior ETF analyst, Eric Balchunas, shared insights on social media platform X, revealing that the new U.S. spot funds witnessed a net inflow of $819 million during the initial two days of trading. Notably, BlackRock's iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund attracted $500 million and $422 million, respectively. On the flip side, the largest fund, Grayscale Bitcoin Trust, experienced outflows of $579 million following its conversion into an ETF last week.

Noelle Acheson, author of the Crypto Is Macro Now newsletter, suggests that profit-taking from speculators who benefited from the narrowing discount of the Grayscale Bitcoin Trust could contribute to Bitcoin's recent weakness.

In tandem with Bitcoin's performance, the Crypto Fear and Greed Index, maintained by tracker Alternative.me, shifted to a "neutral" sentiment on Monday after nearly three months in the "greed" phase. The index, scoring 52 on a scale of 0 to 100, had consistently been in "greed" since October 24, 2023, reaching a peak of 76 points on January 9 in anticipation of the U.S. approval of spot bitcoin ETFs.

Considering factors like volatility, market volume, social media sentiment, dominance, and trends, the index serves as a comprehensive indicator of market sentiment. Bitcoin's trading stability at around $42,550 over the past 24 hours aligns with the neutral stance reflected in the Crypto Fear and Greed Index, signalling a potential period of market reassessment following recent developments.