The Price of Bitcoin Dips Below $46,000 Amid Increased Volatility
The price of bitcoin experienced a dip below the $46,000 mark following the approval of multiple spot ETF applications by the Securities and Exchange Commission. The past 24 hours have seen high volatility in the market, with bitcoin nearly reaching $49,000 before sharply declining. This volatility led to the liquidation of over $80 million worth of leveraged bitcoin positions, primarily longs. According to Coinglass data, total liquidations for leveraged crypto positions in the past day amounted to $209 million.
Understanding Liquidations in Derivatives Markets
Liquidations occur when a trader’s position is forcibly closed due to insufficient funds to cover losses. This happens when market movements go against the trader’s position and deplete their initial margin or collateral.
Increased Market Volatility and Transaction Volume
The recent volatility that led to many liquidations was higher compared to the previous month. The current annualized bitcoin volatility stands at 46.5%, according to The Block’s data dashboard. Additionally, bitcoin’s on-chain transaction volume has reached a 12-month high of $41.5 billion.
Spot Bitcoin ETF Approval Indicates Institutional Approval
While some may interpret the decline in bitcoin’s price as a “sell the news event,” one analyst suggests that the approval of spot bitcoin ETFs signifies institutional approval for the asset. Copper Head of Research Fadi Aboualfa believes this approval demonstrates that the SEC views crypto markets as efficient, transparent, and free from manipulation that could harm investors.
Hot Take: Bitcoin Price Falls Over 6.5% in 24 Hours
The price of bitcoin, the world’s largest cryptocurrency by market capitalization, has experienced a decline of over 6.5% in the past 24 hours, dropping to $45,354. This drop follows increased market volatility and the approval of spot bitcoin ETFs by the SEC.
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