Liquidations Strike Crypto Market
The cryptocurrency market experienced a massive $230 million liquidation in leveraged positions within the past 24 hours due to fluctuations in Bitcoin’s price. Bitcoin initially surged to nearly $48,000 before dropping back down to the $45,000 range.
SEC Misinformation Triggers Price Volatility
The chaos began when a false message was posted on the SEC’s official X account, claiming approval for a spot Bitcoin ETF. This misinformation caused Bitcoin’s price to skyrocket. However, the SEC quickly clarified that the tweet was fake, resulting in a sharp decline in Bitcoin’s value.
Significant Impact on Leveraged Positions
The price fluctuation led to over $90 million in liquidated leveraged Bitcoin positions and a total of $230 million in liquidations across various cryptocurrencies. Long-position closures accounted for $140 million, while short positions faced $91 million in liquidations.
Bitcoin at Risk of Price Correction
Despite anticipation for the approval of spot Bitcoin ETFs, analysts warn of potential price corrections. On-chain data indicates high unrealized profit margins and a history of corrections following such situations.
Volatility Indicates Priced-In Approval
QCP Capital analysts suggest that the recent market reaction may indicate that a Bitcoin ETF approval is already priced into the market, as BTC failed to trade out of its resistance area after the “approval” news.
Hot Take: Beware of Market Volatility Amidst ETF Speculation
The recent surge and subsequent drop in Bitcoin’s price highlight the volatility and uncertainty surrounding the potential approval of spot Bitcoin ETFs. While market sentiment has been influenced by this anticipation, analysts caution against sudden price corrections and suggest that the approval may already be priced into the market. As a crypto investor, it is important to remain vigilant and informed about market conditions to make well-informed trading decisions.
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