In a dramatic turn of events, Bitcoin’s anticipated bull run in 2024 has encountered a significant setback. The cryptocurrency’s price plummeted by over 6.5% today, causing widespread concern among investors and traders. Bitcoin, which had commenced the day above $45,500, with many analysts predicting a surge to $50,000 by month-end, saw its value decline sharply to just under $42,500, wiping over $100 billion in cumulative investor value in the matter of a few hours. The cryptocurrency briefly touched a low of $41,804, erasing gains accrued over the past week.
The broader cryptocurrency market mirrored Bitcoin’s plunge. Ethereum slumped to $2,118. Solana’s value crashed by over 15%, falling below $100. Similarly, XRP, Cardano, and Avalanche saw declines of over 10% each.
Amidst this market turmoil, speculation is rife about potential delays in the approval of Bitcoin ETFs. Coindesk revealed that just before the price dump, Matrixport reported that the U.S. Securities and Exchange Commission (SEC) was unlikely to approve any Bitcoin ETFs this month. This news sent shockwaves through the cryptocurrency market, exacerbating the sell-off.
The market’s reaction to news about Bitcoin ETF proposals was immediate, with Bitcoin’s trading volume skyrocketing past $40 billion, indicating strong selling pressure. The high volume of liquidations, particularly among long positions, further rattled the market.
These developments come as the crypto market anxiously awaits the SEC’s decision on several spot Bitcoin ETF applications. There’s growing speculation that the decision, regardless of its outcome, might trigger chaos. Matrixport analyst Markus Thielen’s recent research note contrasts with the optimistic projections by Bloomberg Intelligence and JP Morgan analysts, suggesting that the SEC may reject all applications for a spot Bitcoin ETF in January, and might push the decision to next quarter.
“SEC chair Gensler is not embracing crypto in the U.S., and it might even be a very long shot to expect that he would vote to approve bitcoin spot ETFs. This might be fulfilled by Q2 2024, but we expect the SEC to reject all proposals in January,” Matrixport analyst Markus Thielen wrote in a report.
“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,” he added.
