Bitcoin Price Plummets 9.4% in Crypto Market Crash, Resulting in $550 Million Liquidation After Rapid Sell-Off Surge
As market prices continue to struggle to break through their resistance levels, investors are increasingly adopting a “sell the news” sentiment. This change in attitude has become more pronounced recently as major players have grown impatient with the repeated failure of Bitcoin and Ethereum prices to make significant gains.
This impatience has resulted in a significant selloff. The recent crash has also sparked lively discussions among analysts, particularly in anticipation of the Securities and Exchange Commission’s (SEC) decision on exchange-traded funds (ETFs).
Following the crash, nearly $550 million worth of cryptocurrencies, including Bitcoin, Ethereum, XRP, and Solana, have been liquidated. This is due to concerns that the push for a Bitcoin spot ETF by Wall Street may be rejected.
The price of Bitcoin has fallen by approximately 9.4%, while Ethereum, XRP, and Solana have experienced declines ranging from 7% to 14%. Coinglass data shows that the total market liquidation in the last 4 hours reached almost $550 million, with bulls liquidating over $512 million in long positions.
On-chain data reveals that Bitcoin miners have sold off $176 million worth of Bitcoin, leading to a bearish sentiment in the market near the $45,000 mark. Additionally, the market plunge may be linked to Matrixport’s analysis, which indicates that the SEC, under Chair Gensler’s cautious approach to crypto, may dismiss all Bitcoin spot ETFs in January.
Despite ongoing discussions, a crucial approval criterion remains unfulfilled, and this may continue until Q2 2024. The report forecasts a potential 20% drop in Bitcoin prices to around $36,000-$38,000 if ETFs are rejected, as assets tied to ETF approval expectations are liquidated.
However, the Matrixport report has faced criticism from the community for its lack of detailed information and supporting evidence.
Analysts view the recent market dip as an opportunity to buy at a discounted price. They interpret this decline as the final correction before a potential surge following the SEC’s approval of the ETF. Prominent crypto analyst PlanB suggests that the recent market downturn may be an attempt at stop-loss hunting.
This strategy aims to liquidate leveraged long positions before any potential market upswing following the ETF decision. Such moves are not uncommon, especially among major players who use significant price shifts to trigger stop-loss orders and increase market volatility.
Some analysts argue that the observed liquidations are within the normal range of Bitcoin’s bull market cycles.
Bloomberg ETF Analyst Eric Balchunas has stated that there is no indication suggesting anything other than approval for the Bitcoin Spot ETF. Balchunas expressed confusion over the rapid change in sentiment from Matrixport analysts and firmly believes that the probability of the ETF’s approval remains as high as 90%.
However, the crypto market and Bitcoin quickly recovered from its low point of $40,000, driven by significant buying activity.