- January 5, 2024
- Posted by: [email protected]
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The cryptocurrency market witnessed an unprecedented surge in volatility over the past hour, resulting in the liquidation of long positions exceeding a staggering $460 million. This tumultuous turn of events unfolded as Bitcoin, the flagship cryptocurrency, experienced a sharp 8% decline. The root cause of this sudden market upheaval can be traced back to swirling rumors suggesting that the Securities and Exchange Commission (SEC) might postpone the approval of spot exchange-traded funds (ETFs).
According to comprehensive data by CoinGlass, long traders found themselves grappling with substantial losses, tallying up to approximately $462 million across major centralized exchanges within the tumultuous past hour alone. The broader picture over the last 24 hours paints a grim scenario, with a notable 172,626 traders facing liquidation. Total long liquidations reached an alarming $557 million, while short liquidations registered around $58 million, reflecting the widespread impact of this market correction.
OKX emerged as the core of these liquidations among cryptocurrency exchanges, taking in a whopping sum exceeding $230 million. Binance closely followed suit, with liquidations totaling $105 million, while Huobi trailed with approximately $74 million. CoinGlass data highlighted that the lion’s share of these liquidations transpired within the past hour, with the total value of liquidated positions skyrocketing to an eye-watering $487 million.
Delving into specific cryptocurrency derivatives, Bitcoin-related futures contracts bore the brunt of the market turmoil, witnessing a combined $110 million in liquidations across both short and long positions over the preceding day. Simultaneously, Ethereum-linked futures weren’t spared, experiencing liquidations surpassing $82 million.
The origin of this market turbulence can be traced to a report from Matrixport, suggesting that the SEC is leaning towards rejecting spot Bitcoin ETF applications in the imminent future. Matrix on Target, in a recent post on X (formerly Twitter), projected a probable rejection by the SEC in January for Bitcoin Spot ETFs. The post not only advised traders to hedge their long exposure but also underscored SEC Chair Gensler’s cautious stance towards cryptocurrencies. The report cautioned that a potential 20% decline in Bitcoin’s price could be on the horizon upon ETF denial, even though a positive outlook for the cryptocurrency market at the end of 2024 remains a possibility.
As of the current moment, Bitcoin is trading at $42,379, reflecting a decline of more than 6% over the past day. Market participants are on high alert, closely monitoring developments surrounding ETF approval and bracing for the potential repercussions on cryptocurrency prices in the near term. The situation underscores the inherent volatility and sensitivity of the cryptocurrency market to regulatory developments and speculative rumors.
