$670,000,000 in Liquidations Rocks Crypto Markets As Bitcoin ETF Rejection Predictions Swirl – Crypto News – Crypto News
Connect with us
Cardano Creator Charles Hoskinson Says Crypto Markets Are Disconnected From Reality Amid 'Sea of ​​Red' Cardano Creator Charles Hoskinson Says Crypto Markets Are Disconnected From Reality Amid 'Sea of ​​Red'

others

$670,000,000 in Liquidations Rocks Crypto Markets As Bitcoin ETF Rejection Predictions Swirl – Crypto News

Published

2 years ago

on

After a strong start to the year, Bitcoin (BTC) and altcoins are weathering a sharp correction which has caused over $670 million in liquidations in mere hours.

According to crypto exchange data platform Coinglass, traders have suffered $670 million worth of liquidations in the last 24 hours, with the overwhelming majority being traders who were positioned long while markets corrected.

Bitcoin fell over 8% from $45,469 to $41,805 earlier in about 3 hours, while Ethereum and other altcoins dropped more sharply.

While the exact cause of the market correction is unknown, it does coincide with a viral report from crypto financial services firm Matrixport.

The firm predicts that the U.S. Securities and Exchange Commission (SEC) will ultimately reject applications for spot Bitcoin exchange-traded funds (ETFs), despite the overwhelming majority of market participants expecting the opposite.

In a paper titled “Why the SEC will REJECT Bitcoin Spot ETFs again,” Matrixport says there is no logical reason to expect SEC Chair Gary Gensler, who has been vocal about crypto needing tighter regulations, to vote in favor of an ETF.

Matrixport also says that markets may have already become frothy, noting large buildups in leverage. the firm suggests that bulls looking to hedge their longs may want to take a look at put options at the $40,000 strike price in case of a collapse below support.

“Since traders started betting on an ETF approval in September 2023, at least $14 billion of extra fiat and leverage has been deployed into crypto. Some of these flows might be associated with easier macro conditions as the Fed has turned dovish. However, of those $14 billion of additional longs, $10 billion might be related to the ETF approval expectation.

If there is any denial by the SEC, we could see cascading liquidations as we expect most of the $5.1 billion in additional perpetual long Bitcoin futures to be unwound. We could see Bitcoin prices declining by -20% very quickly and falling back to the $36,000/$38,000 range.

Suppose market participants have not heard of any approvals by Friday, January 5, 2024. In that case, Matrix on Target recommends that traders hedge their long exposure by buying the $40,000 strike puts for the end of January or even going outright short Bitcoin through options.”

Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox

Check Price Action

Follow us on Twitter, Facebook and Telegram

Surf The Daily Hodl Mix

Check Latest News Headlines

&nbsp

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Featured Image: Shutterstock/SimoneN/bobyramone

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending