In the fast-paced world of cryptocurrency, a single rumour can send shockwaves through the market, and that’s precisely what happened when whispers of the SEC’s potential delay in approving Bitcoin Spot ETFs surfaced. Over the past hour, over $460 million in long positions were liquidated across major centralised exchanges, and the crypto market saw an 8% drop in Bitcoin’s price. In this article, we delve into the details of this recent upheaval and explore the factors contributing to this rollercoaster ride.
The Liquidation Frenzy
UPDATE ‼️ Bitcoin price dumped 9% in 1 hour on the basis of a report by Matrixport predicting an SEC rejection of ALL Bitcoin ETF applications.
Their justification? Politics.
– 5 voting commissioners are Democrats. – Democrats don't like 'crypto'. – Applicants haven't satisfied… pic.twitter.com/v6oD7zwPj7
According to data from CoinGlass, long traders suffered substantial losses, totalling approximately $462 million, in the last hour alone. Over the past 24 hours, 172,626 traders were liquidated, with long positions accounting for a significant portion of the damage, amounting to $557 million, while short liquidations stood at around $58 million.
OKX, the cryptocurrency exchange, bore the brunt of these liquidations, with over $230 million in losses, followed by Binance at $105 million and Huobi (HTX) at approximately $74 million. The lion’s share of these liquidations came within the last hour when the value of liquidated positions soared to $487 million.
Notably, Bitcoin-linked futures contracts experienced liquidations totalling $110 million, covering long and short positions, within the past 24 hours. Additionally, Ethereum-linked futures saw over $82 million in liquidations, underscoring the widespread market turmoil.
The ETF Delay Rumors
Matrix on Target projects a January rejection for Bitcoin Spot ETFs by the SEC, cautioning traders to hedge long exposure. With #SEC Chair Gensler’s skepticism towards #crypto, a potential -20% #Bitcoin price drop is anticipated upon #ETF denial, though a positive end-of-2024… pic.twitter.com/IgaMhBJtiP
The catalyst for this market mayhem was the news surrounding the SEC’s stance on Bitcoin Spot ETFs. A report from Matrixport predicted the rejection of spot Bitcoin ETF applications by the SEC, causing a sharp drop in Bitcoin’s price to as low as $40,000.
Matrixport, a crypto investment services provider, voiced pessimism regarding the SEC’s approval of Bitcoin Spot ETFs. They highlighted SEC Chair Gensler’s reluctance to embrace cryptocurrencies, especially in the U.S., where the regulatory landscape remains uncertain. Gensler’s scepticism towards the crypto industry and his preference for stringent compliance measures have cast a shadow over the possibility of ETF approval.
Matrixport’s prediction of a January rejection for Bitcoin Spot ETFs fueled concerns among traders, hinting at a potential 20% drop in Bitcoin’s price upon ETF denial. However, they also pointed out that a positive outlook for the cryptocurrency market by the end of 2024 remains possible despite short-term uncertainties.
At the time of writing, Bitcoin is trading at $42,379, reflecting a more than 6% decrease in value over the past day. The crypto market, ever resilient, continues to navigate the turbulent waters of speculation and regulatory uncertainty.
Conclusion
The cryptocurrency market has once again demonstrated its vulnerability to news and rumours. The recent cascade of liquidations, triggered by the SEC ETF delay rumours, has underscored the inherent volatility and unpredictability of the crypto space. As we progress, traders and investors must remain vigilant, keeping a keen eye on regulatory developments and market sentiment. At the same time, the industry adapts to the ever-changing landscape of cryptocurrency investments.
