Largest Liquidations Since August 2023
The crypto market experienced a significant liquidation event on January 3, 2024, when Bitcoin (BTC) plummeted due to concerns about the SEC rejecting spot Bitcoin ETF applications. According to Bitfinex, this drop led to the largest wave of liquidations since August 2023, with long positions losing $591 million and short positions losing $94 million.
Bitcoin’s Swift Recovery
Bitcoin’s price fell by 11% in a matter of hours, dropping from $45,400 to $40,400. However, the digital asset quickly recovered and reached $47,000 shortly after. Despite the recovery, this dip resulted in the third-largest number of long liquidations since November 2022.
The Genesis Block Celebration
The price fall coincided with the celebration of Bitcoin’s 15th birthday, known as the Genesis Block. This event marked the start of the Bitcoin network.
SEC Report Triggers Liquidations
A report from Matrixport suggested that the SEC may reject or delay all spot Bitcoin ETF applications. This report led to over $1.8 billion in open interest positions being liquidated or sold off.
Bitfinex’s Perspective
Bitfinex stated that pullbacks like these are expected and healthy for the market. They believe it is a result of overly bullish sentiment being reset and view it as a positive development.
Bitcoin ETF Approval Expected
Despite the concerns raised by Matrixport’s report, experts and the crypto community remain confident that Bitcoin ETF applications will be approved this week. The recent amended filings by applicants on January 5 have further fueled this belief.
Rallying Bitcoin Price
Bitcoin has been rallying on the anticipation of potential ETF approval, ending Q4 2023 with a 56.5% increase. This marks the third-highest quarterly rise since 2019.
Strategic Positioning by Long-Term Holders
Long-term Bitcoin holders are positioning themselves in anticipation of price reactions to the potential ETF approval. On December 27, 2023, there was a significant Coin Days Destroyed (CDD) value, indicating strategic positioning by this group of investors.
Hot Take: Uncertainty Surrounds Bitcoin ETF Approval
The recent liquidation event and concerns about the SEC’s decision on Bitcoin ETF applications have created uncertainty in the market. While experts and the crypto community remain optimistic about approval, the outcome is still uncertain. Bitcoin’s price volatility and the strategic positioning of long-term holders indicate that the market is closely watching this development. As the decision approaches, all eyes are on the SEC to determine the future of Bitcoin ETFs and their potential impact on the cryptocurrency market.
By
By
By
By
By