Bitcoin's $4,000 Crash Unrelated to Spot ETF Fears, Declared as Market Behaviour Normalcy
Summary:
Contrary to popular belief, Bitcoin's sudden $4,000 drop wasn't due to panic over potential disapproval of the spot Exchange-Traded Fund (ETF) by U.S. regulators, but was a result of standard market behavior, leading to half a billion dollars in cryptocurrency long liquidations. Despite speculation by Matrixport, a crypto financial services platform, about the SEC disapproving the spot ETF, no substantial proof was provided. The market reaction to this speculation and the standard market behaviors it triggered continue to be points of discussion among analysts.
Contrary to widespread belief, Bitcoin's sudden $4,000 plunge wasn't triggered by apprehension over U.S. regulator's potential disapproval of the spot Exchange-Traded Fund (ETF). This point of view is common among analysts following a quick drop in Bitcoin's value that resulted in about half a billion dollars worth of cryptocurrency longs being liquidated.
A striking depreciation occurred on Bitcoin's fifteenth anniversary, January 3, causing nearly a 9% drop in the market, according to data from Cointelegraph Markets Pro and TradingView. CoinGlass, a statistical resource, estimated the day's total tally of long liquidations at $514 million.
Amid these market movements, Matrixport, a crypto financial service platform, speculated that the U.S. Securities and Exchange Commission (SEC) is set to disapprove the spot ETF. The platform expressed that a spot ETF could be a significant growth opportunity for the crypto industry. However, based on comments from Gensler in December 2023, they believe more rigorous compliance is required.
They asserted that from a political viewpoint, there's no incentive to endorse a Bitcoin Spot ETF, which could potentially establish Bitcoin as a viable alternative investment. Despite the impact of this report on the market, Matrixport provides no substantial proof for their conviction that the ETF would definitely be rejected.
This particular analyst's perspective left Scott Melker, a trader, analyst, and podcast host, puzzled. He stated that the market downturn was simply a result of leverage and not the firm's view, which, according to him, contradicts expert opinions.
Some individuals suggested that the liquidations were just standard market behavior and no cause for concern. Joe Carlasare, a crypto-focused litigator stated, Bitcoin didn't experience a downturn because of the ETF denial speculation, rather it was due to overbought market conditions resulting in a long squeeze.
However, Matrixport anticipates a slight further drop if the SEC rejects the ETF, predicting that Bitcoin prices could drop by -20% rapidly, potentially falling within the $36,000/$38,000 bracket.
It's worth noting that this article serves to provide information and not investment advice or recommendations. Investments and trading moves come with risks, and individuals should engage in thorough research before making a decision.
Published At
1/3/2024 4:45:32 PM
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