Cryptocurrency Market Plunges Amid Concerns Over Spot Bitcoin ETF Approval
Major cryptocurrencies took a nosedive on Wednesday evening amid concerns about the possible approval of a spot Bitcoin ETF. Bitcoin, Ethereum, and Dogecoin all experienced losses in the past 24 hours, with over $600 million worth of cryptocurrency longs liquidated. This market downturn came after a report by digital asset firm Matrixport predicted that the Securities and Exchange Commission (SEC) would reject all spot bitcoin ETF applications.
Over $600 Million Worth of Cryptocurrency Longs Liquidated in 24 Hours
According to Coinglass data, over $600 million worth of cryptocurrency longs were liquidated within a 24-hour period. This indicates that many traders who had placed bets on higher prices with borrowed money had to close their positions due to the market decline. It is important to note that liquidations of this magnitude can amplify the price drop and create a cascading effect.
Bitcoin Drops to $40,000 Amid Report Predicting SEC Rejection of Spot Bitcoin ETF
Bitcoin experienced a rapid drop from approximately $45,000 to a low of $40,000 early on Wednesday. This decline coincided with the release of a report by Matrixport predicting that the SEC would reject all spot bitcoin ETF applications. The sudden drop in Bitcoin’s price suggests that investors reacted strongly to the report’s prediction, as the approval of a spot Bitcoin ETF is seen as a major milestone for the cryptocurrency.
Matrixport Co-Founder Downplays Report’s Role in Market Downturn
Jihan Wu, co-founder of Matrixport, downplayed the role of the report in the market downturn. He stated that it is unrealistic to believe that a single report could trigger such a significant decline in the cryptocurrency market. He also pointed to the recent weakness in cryptocurrency-related stocks as a potential indicator of waning momentum for digital assets. Wu emphasized that Bitcoin’s price remained stable despite the unexpected drop in crypto stocks.
Global Crypto Market Cap Decreases by 1.23%, Nasdaq Composite Index Continues Losing Streak
The global crypto market cap has reached $1.73 trillion, marking a 1.23% decrease in the last 24 hours. This decrease can be attributed to the decline in Bitcoin’s price and the overall market sentiment. In addition, the Nasdaq Composite index closed at 14,592.21, marking a 1.18% decrease and continuing its trend of four consecutive losing days. The S&P 500 also ended with a slip of 0.80%. The market downturn indicates that investors may be selling off last year’s tech winners.
In conclusion, the cryptocurrency market experienced a significant decline amid concerns about the possible approval of a spot Bitcoin ETF. The liquidation of over $600 million worth of cryptocurrency longs and the rapid drop in Bitcoin’s price reflect the volatility and sensitivity of the market. While the Matrixport report may have contributed to the market downturn, its co-founder downplayed its role and pointed to other factors. The decrease in the global crypto market cap and the continued decline of the Nasdaq Composite index indicate a cautious sentiment among investors.
Analyst comment
Negative news. The market is expected to continue experiencing volatility as concerns over the approval of a spot Bitcoin ETF persist. The liquidation of cryptocurrency longs and the drop in Bitcoin’s price may contribute to a further decline in the market. Investors are cautious, reflected in the decrease in the global crypto market cap and the ongoing losing streak of the Nasdaq Composite index.
