The recent crash in Bitcoin’s price below $42,000 didn’t occur because of worries about the SEC rejecting the spot Bitcoin ETF, as suggested by a report.
According to several voices in the crypto space, the sudden $4,000 drop in Bitcoin’s value within hours wasn’t driven by panic over the possible rejection of the US spot exchange-traded fund (ETF).
This market turbulence, leading to over half a billion dollars in long liquidations, came amidst Bitcoin’s 15th birthday celebrations on January 3. Data from TradingView reveals a nearly 9% decline in Bitcoin’s value.
CoinGlass data highlights that long liquidations for the day reached a total of $514 million, triggered partly by a report from Matrixport. The report claimed that the SEC is poised to reject the spot ETF, citing political reasons and the need for stricter industry compliance, although it lacked concrete evidence for the expected rejection.
Despite the report’s impact, the crypto community expressed skepticism about its reasoning. The official window for the SEC’s decision on the ETF runs from January 4 to January 10.
In response to the market reaction, Scott Melker, a trader and analyst, questioned the rationale behind the report, while others suggested that such liquidations were typical in Bitcoin’s bullish market cycles.
Echoing similar sentiments, crypto-focused litigator Joe Carlasare dismissed the report’s influence, attributing the sell-off to standard market behavior and the need for temporary liquidity. He emphasized that market movements aren’t always tied to specific news events.
Matrixport, however, forecasted a modest further decline in case of an SEC rejection, projecting a potential rapid 20% drop in Bitcoin’s price to the $36,000/$38,000 range.
Amidst these discussions, previous analyses had already indicated mid- to low-$30,000 levels as potential downside targets for Bitcoin.
