The global digital assets market recorded a massive sell-off on Wednesday as Bitcoin (BTC) crashed to the $41k price level. This major sell-off occurred when Bitcoin recently regained the vital $45k price level. The cumulative market cap dropped by 7.52% over the past day to stand at $1.62 trillion.
Is Bitcoin bullish rally over?
According to the data, Bitcoin price dropped by around 9% in the last 24 hours. BTC price went down to trade at $40,800 level. However, Bitcoin is trading at an average price of $41,814, at the press time. Its 24 hour trading volume is up by 20% to stand at $40.7 billion.
Data provided by the Coinglass depicts that more than $624 million worth of long and short bets got liquidated in the last 24 hours. However, $463 million worth of liquidation was recorded in the span of one hour. The open interest now stands at around $1.5 billion. The largest single liquidation recorded by the trackers has been $14.26 million.
As we dig in, out of the cumulative liquidation of $463 million in the last one hour, $435 million worth of long positions got liquidated. This suggests that the traders were hoping for the crypto market and Bitcoin to surge more.
It is expected that an expectation of disapproval spot Bitcoin ETF resulted in the crash.
No ETF approval?
Matrix on Target predicts the SEC will reject Bitcoin Spot ETFs in January, citing unmet critical requirements. Approval seems unlikely with a Democrat-dominated leadership, including SEC Chair Gensler, who isn’t crypto-friendly.
It added that Gensler sees the industry needing more compliance, making a Bitcoin Spot ETF approval politically unattractive. The anticipation led to $14 billion in inflows, with $10 billion linked to ETF expectations. A denial could trigger cascading liquidations, swiftly dropping Bitcoin by -20% to $36,000/$38,000. Matrix on Target advises hedging with $40,000 strike puts or going short on Bitcoin through options by January 5, 2024, despite an optimistic year-end price expectation of over $42,000.
