According to Cointelegraph; As per a popular sentiment in the crypto community, the recent 8% sharp BTC price drop to under $42,000 is not correlated to anticipated U.S. regulators' rejection of the spot exchange-traded fund (ETF).
This assertion counters fears sparked by recent rapid BTC price fluctuations, which triggered crypto long liquidations worth half a billion dollars.
Coininciding with Bitcoin's fifteenth birthday on January 3rd, BTC's price took a nearly 9% plunge, as confirmed by Cointelegraph Markets Pro and TradingView data. CoinGlass, a leading cryptocurrency statistics resource, recorded the day’s long liquidations at a staggering $514 million.
Accompanying this dramatic movement was a report from Matrixport, a crypto financial services platform. The report implied the U.S. Securities and Exchange Commission (SEC) was likely to reject the spot ETF. However, Matrixport failed to substantiate this claim with concrete evidence.
In response to this report, Scott Melker, a renowned trader, analyst, and podcast host, and crypto-focused litigator Joe Carlasare, were skeptical of Matrixport's perspective. They suggested that the observed liquidations were rather a standard part of Bitcoin's bull market behavior, not a reaction to an alleged report about ETF denial.
They further explained that these market coronations usually occur when the market is overbought, hence, creating a compelling opportunity to execute a long squeeze.
Despite the prevailing crypto market volatility, Matrixport predicts a mild further drop if the SEC denies the ETF application:
“If there is any denial by the SEC, we could see cascading liquidations as we expect most of the $5.1 billion in additional perpetual long Bitcoin futures to be unwound,” the Matrixport report continued.
The speculation targets a quick 20% drop in Bitcoin price, potentially falling back to the $36,000/$38,000 range. However, these predictions remain speculative as the crypto market awaits confirmation from the SEC between January 4th and January 10th.
