Wednesday morning brought an unexpected turn for Bitcoin (BTC) as its value plummeted in a matter of minutes. Starting around $45,132, Bitcoin’s price nosedived to as low as $40,750, wiping out gains accrued over the previous week.
Reports from CoinMarketCap revealed a staggering 9.5% drop in Bitcoin’s value during this abrupt flash crash. The fallout led to liquidations exceeding $595 million in crypto long positions within 24 hours, with Bitcoin longs accounting for $137 million in the past hour alone, according to CoinGlass data.
The impact wasn’t limited to Bitcoin—other cryptocurrencies followed suit. Ethereum (ETH) faced a sharp 10.9% decline, and Solana (SOL) witnessed a staggering crash of over 20% during this sudden market turbulence. However, both Bitcoin and alternative cryptocurrencies have since rebounded from their lowest points.
Markus Thielen, Matrixport’s Head of Research, presented a conflicting view regarding spot Bitcoin ETFs in a client-focused research note released on January 3. This contradicted an earlier stance on January 2 that anticipated potential approvals for these ETFs. Thielen’s note suggested the SEC would likely reject spot Bitcoin ETF applications this January.
This plunge arrives amid the crypto community’s anticipation of the SEC’s decision regarding multiple spot Bitcoin ETF applications. Some analysts speculate that the market reaction might trigger a “sell-the-news” scenario. However, the exact reasons behind this sudden market downturn remain unclear. It could be linked to profit-taking before the SEC’s decision, uncertainties prevailing in broader financial markets, or a combination of various factors.
