Surge in Volatility Results in $215M in Liquidations
The cryptocurrency market has recently seen a significant increase in volatility, leading to over $215 million in liquidations within the past 24 hours. Bitcoin, which had been trading at a multi-year low, experienced a 5% rebound, reaching a price of $43,116. This rally helped recover the losses from the previous weekend and allowed Bitcoin to regain its local top. The sudden price movement followed a sharp decline from $44,000 to $40,750 within a 24-hour period. Ethereum also witnessed a similar pattern, with a 5% range tumble and subsequent rebound to trade at $2,250 after suffering a 9% crash. The increased volatility is reflected in the moving averages, showing levels not seen in years.
Over 100,000 Traders Liquidated
In the midst of this market turmoil, more than 100,000 traders found themselves liquidated, with their total positions exceeding $215 million within the past 24 hours. Long positions accounted for over 51% of the liquidated assets, indicating that most traders faced losses due to the downside momentum. Interestingly, short positions represented nearly two-thirds of the total liquidations. These figures are based on data from CoinGlass.
Bitcoin Dominance Reaches Highest Level in Two Years
Bitcoin’s dominance over the overall crypto market capitalization has reached over 52%, its highest level since April 2021. This surge in dominance coincides with speculation that the U.S. Securities and Exchange Commission (SEC) may soon approve the first spot Bitcoin exchange-traded fund (ETF). Unlike existing futures-based Bitcoin ETFs, a spot ETF would directly invest in and hold BTC, exerting bullish pressure on Bitcoin’s supply. Several issuers have submitted updated spot Bitcoin ETF applications to the SEC, and prominent investors and analysts anticipate the approval of these applications in early 2024. Some experts believe that Bitcoin could skyrocket to $1 million following the approval of a spot ETF.
Hot Take: Potential Impact of Spot Bitcoin ETF Approval
With the potential approval of spot Bitcoin exchange-traded fund (ETF) applications by the SEC, there is speculation about the impact on Bitcoin’s price. Experts anticipate a surge in institutional capital flowing into Bitcoin exchanges, as a spot ETF would create a limited supply of BTC available for purchase. Samson Mow, CEO of Jan3, predicts that Bitcoin could reach $1 million within days or weeks after the approval, due to the influx of money seeking to buy the limited available supply. This scenario would result in a rapid increase in Bitcoin’s price. However, it remains to be seen if and when these spot Bitcoin ETFs will receive regulatory approval.
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