Bitcoin's volatility is back in the headlines. The cryptocurrency market has been rocked by a precipitous 8% fall in Bitcoin. This led to the liquidation of $400 million on derivatives markets. This fall marks a direct reaction. It is due to the uncertainties surrounding the approval of a Bitcoin cash ETF by the US Securities and Exchange Commission (SEC).
The Reasons for the Fall: Market Anticipation and Reaction
This recent fall in Bitcoin is mainly due to the anticipation of a rejection by the SEC. This rejection concerns Bitcoin ETF proposals submitted. According to Matrixport, a financial services provider, none of the current applications meet the SEC's critical requirements, postponing any possible approval until the second quarter of 2024. Investors, anticipating this rejection, showed their concern with a massive sell-off, leading to a significant sell-off in the markets.
Immediate Impact on the Bitcoin Price
Bitcoin, which had peaked at $45,500 earlier in the morning, fell to a low of $40,550 before recovering slightly to $42,200. This fall led to a $2 billion reduction in open interest. This was the result of liquidations, the devaluation of BTC and a reduction in traders' exposure to long and short positions.
Bitcoin's current situation demonstrates the significant impact of regulatory decisions on cryptocurrency markets. As investors and market participants eagerly await the SEC's decision, this volatility serves as a reminder of the unpredictable nature of cryptocurrency investing.
