The report released by Matrixport, Chairman Jihan Wu, on the potential rejection of Bitcoin spot ETFs by the U.S. Securities and Exchange Commission (SEC) has significantly impacted Bitcoin’s price and market sentiment.
Bitcoin ETF Matrixport Report
According to Matrixport’s analysis, all applications for listing Bitcoin spot ETFs failed to meet the key criteria for SEC approval, predicting that these requirements will not be met until the second quarter of 2024. Consequently, they anticipated the SEC to reject all proposals in January. An hour after the report, Bitcoin’s price experienced a rapid drop and rebound, currently showing a 6% decrease, having previously reached a one-year high of $45,800 before falling to $40,800.
This report led to a notable market reaction, with Bitcoin prices plummeting by over 10 percent. Matrixport’s forecast heightened market unease due to allegations of market manipulation and looming deadlines.
The report by Matrixport’s Marcus Tilen pointed out the political dynamics within the SEC and ongoing compliance issues in the cryptocurrency industry as potential reasons for the rejection. Tilen predicted a 20 percent drop in Bitcoin prices, potentially falling to the $36,000 to $38,000 range, triggered by the dramatic liquidation of billions of dollars in Bitcoin’s perpetual long futures.
Matrixport also warned of significant selling pressure, particularly from the $5.1 billion in Bitcoin perpetual long futures, in case the SEC rejects the ETF. This selling pressure could lead to a 20% decrease in Bitcoin prices. They suggested strategies for traders to hedge their long positions or explore short positions in Bitcoin through options.
liquidations among traders occurred
The aftermath of yesterday’s report saw a surge in liquidations across the derivatives market due to the decline in major cryptocurrencies. Regardless of whether the report triggered the collapse, rapid long liquidations among traders occurred.
In the last 24 hours, over $577 million in long positions have been liquidated in the cryptocurrency market, with $554.5 million liquidated in the last 12 hours.
This sharp drop serves as a reminder of the volatile nature of the market. While some lost money, others gained. Personally, I remain positive about Bitcoin’s future, but this day has shown that the path will not be easy. The rapid falls of numerous coins and the market’s immediate rebound offer significant insights.