Ether faced a notable setback, dropping 14% in a rapid sell-off across the entire crypto market. This decline, from $2,380 to $2,050 within two hours, marked a level unseen since December 1, 2023. The sudden swing resulted in liquidating $100 million in ETH long future contracts, tied to optimistic price predictions.
Debates arise regarding the significance of this correction, questioning whether it marks the conclusion of the bullish momentum. Despite three unsuccessful attempts to surpass $2,400 in the past month and Ether’s price dipping below $2,150 thrice in the same period, a definitive end to the bullish trend is uncertain.
The noteworthy aspect on the price chart is the swift rebound to $2,230 on Jan. 3, hinting that the trigger behind the panic sell-off and derivative liquidations might have diminished. Some attribute the trigger to a market analysis by Matrixport, speculating on the denial of the spot Bitcoin ETF. Matrixport, co-founded by Jihan Wu of Bitmain’s ASIC miner fame, sparked speculation.
Investors now consider insights from Eric Balchunas, a senior ETF analyst at Bloomberg, who suggests a 90% chance of approval for the ETF. However, he highlights the likelihood of delays in the final decision by the U.S. Securities and Exchange Commission. The market reaction appears exaggerated, placing excessive confidence in the Jan. 10 deadline and blurring lines between Matrixport’s analysis and factual developments.
