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Major cryptocurrencies took a nosedive on Wednesday evening amid concerns about the possible approval of a spot Bitcoin ETF.CryptocurrencyGains +/-Price (Recorded 9:30 p.m. EST)Bitcoin BTC/USD -5.74%$42,746Ethereum ETH/USD -7.05%$2,207Dogecoin DOGE/USD -11.19%$0.071
What Happened: Data from Coinglass shows that in the past 24 hours, over $600 million worth of cryptocurrency longs, (which are bets on higher prices with borrowed money) were liquidated.
Bitcoin experienced a rapid drop from approximately $45,000 to a low of $40,000 early on Wednesday. The decline coincided with the release of a report by Markus Thielen, published by Singapore-based digital asset firm Matrixport, predicting that the Securities and Exchange Commission (SEC) would reject all spot bitcoin ETF applications.
This contradicted the firms previous outlook just a day earlier, which had anticipated an imminent approval and a BTC surge to $50,000.
Jihan Wu, co-founder of Matrixport, downplayed the reports role in the market downturn and said the recent weakness in cryptocurrency-related stocks as a potential indicator of waning momentum for digital assets.
While on holiday, I have more time than usual for writing.
Matrixport, a small private firm based in Asia, is a considerable distance from New York, requiring a 17-hour and 55-minute flight. We don’t receive insider information from U.S. regulators. To the best of my knowledge, Jihan Wu (@JihanWu) January 3, 2024
Its unrealistic to believe that a Matrixport report could trigger a trillion-dollar size market to crash, Wu posted on X Wednesday. We also experienced an unexpected drop in crypto stocks for consecutive trading days, while Bitcoins price remained stable."
The sudden drop occurred just one day after CNBC host and former hedge fund manager Jim Cramer made favorable remarks about Bitcoin, retracting his previous negative stance from October.Loading… Loading…
Top Gainer (24 Hour)CryptocurrencyGains +/-Price (Recorded 9:30 p.m. EDT)Sei SEI/USD +11.31%$0.79Akash Network AKT/USD +8.81%$2.54Bitget Token BGB/USD +5.71%$0.64
The global crypto market cap has reached $1.73 trillion, marking a 1.23% decrease in the last 24 hours.
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 ended at 4,704.81 with a 0.80% slip.
Investors seemed to be selling off last year's tech winners, which had soared in anticipation of easing monetary policy in 2024. However, with uncertainty surrounding the timing of the Federal Reserves rate cuts, investors appeared to have tempered their enthusiasm.
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Analyst Notes: Cryptocurrency analyst Michael Van de Poppe referred to the launch of the Bitcoin Spot ETF as a highly significant event in the history of Bitcoin.
"The second time in a row the markets react from an intern posting unconfirmed information. Thats how easy to manipulate the markets are. Buy the dips and be patient."
Van de Poppe in a separate tweet on X added, "Not much has happened, despite a liquidation on altcoins. Bitcoin still stuck in a range. Personal interest to buy into it at $36-39K and interest to sell at $48-51K. These areas are likely going to be the areas for Bitcoin for a substantial period of time."
Not much has happened, despite a liquidation on altcoins. #Bitcoin still stuck in a range.
Personal interest to buy into it at $36-39K and interest to sell at $48-51K.
These areas are likely going to be the areas for Bitcoin for a substantial period of time. pic.twitter.com/UxxGZVlolr Michal van de Poppe (@CryptoMichNL) January 3, 2024
Pseudonymous cryptocurrency analyst Crypto Tony said, "quite simply, we hold $41,000 and we pump to new highs towards $47,000."
$BTC / $USD Update
Quite simply, we hold $41,000 and we pump to new highs towards $47,000 pic.twitter.com/Lw2vuMMtnF Crypto Tony (@CryptoTony__) January 3, 2024
According to Santiment, a company specializing in on-chain analytics, the crypto markets have experienced a decrease, causing a divide among traders. Bitcoins decline to $42.2K has contributed to todays highest BTC trading volume level since March 17th, with the possibility of daily trading surpassing year highs in the next couple of hours.
? #Crypto markets have fallen, creating polarity among traders. #Bitcoin’s drop to $42.2K has helped push today to the highest $BTC trading volume level since March 17th, with the potential for daily trading to surpass year highs in the next couple hours. https://t.co/FXVxAAfT3W pic.twitter.com/byPlzBilyt Santiment (@santimentfeed) January 3, 2024
Photo by FellowNeko on Shutterstock
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