On the evening of the 3rd
The virtual currency market has suffered a sell-off storm!
At 20 o'clock on January 3, the price of bitcoin suddenly dived, plummeting by more than $4,000 in just 10 minutes. As of 21:20, the price of Bitcoin stopped falling in the short term and rebounded, temporarily trading at $42,360.
Image source: CMC
Bitcoin Horror Diving
From 20 o'clock on January 3, the price of bitcoin fell rapidly, and within 5 minutes, it was hit by the bears out of the "waterfall". After falling below the key point of $45,000, Bitcoin's bullish defensive front collapsed at the touch of a button and fell again, falling below the $44,000, $43,000, and $42,000 integer mark.
According to Coinglass statistics, as of 21:00 on January 3, more than 170,000 people were liquidated on the whole network in 24 hours, and the total amount of liquidation was as high as 613 million US dollars (about 4.38 billion yuan).
Image source: Coinglass
Due to the sharp drop in the price of Bitcoin, the virtual currency market suffered a bloodbath, and the prices of many mainstream virtual currencies fell sharply. As of 21:20, Ethereum fell by more than 7%, Ripple fell by more than 12%, and Dogecoin fell by more than 10%.
The reporter noticed that market investors are quite divided on the next Bitcoin market trend. Some analysts pointed out that the expectation that the bitcoin spot ETF will be approved in the United States in the near future, coupled with the rising expectations of the Federal Reserve's interest rate cut, has triggered investors' enthusiasm for investing in the virtual currency market, driving the price of bitcoin to rise sharply. The sharp drop on the 3rd may be due to the recent rapid rise in prices, and investors tend to take profits and pull back.
Data released on social platforms by on-chain analyst Ali shows that in the past 10 days, Bitcoin miners have sold about 4,000 bitcoins with a total value of more than $176 million.
On the news side, on January 3, local time, Matrixport research report showed that the SEC (Securities and Exchange Commission) is expected to reject all applications in January because all Bitcoin spot ETF applications failed to meet one of the key requirements. At this time, it is unlikely that the SEC voting committee will approve a Bitcoin spot ETF because it would legalize Bitcoin.
Hong Shuning, a senior bitcoin researcher, told reporters that the research report released by Matrixport predicts that if the SEC refuses to approve, there will be large-scale liquidation activities in the market, and the price of bitcoin will fall to $36,000 to $38,000. The market was affected by this news, which caused panic selling. However, before the official news of the SEC lands, the market may undergo a major adjustment, and investors should pay attention to the risks.
Many speculators tend to take profits
Since the second half of 2023, the price of Bitcoin has continued to rise, with a cumulative increase of more than 145% in 2023. Affected by the overall upward trend, the total market value of virtual currencies has increased rapidly. According to Coingecko data, the total market value of virtual currencies is currently close to 1.5 trillion US dollars (about 10.7 trillion yuan).
Although the 3-day dive caused many investors to pay heavy losses, there are still many investors who are bullish on Bitcoin. According to Coinglass statistics, in the past three months, the long-to-short ratio of investors' holdings has shown a trend of first increasing and then slowly falling, and is still above the 1.25 level, while the ratio of long-to-short positions is 1.09:1.
Ayyar, vice president of international markets at virtual currency trading platform CoinDCX, said that much of the rally in bitcoin was based on the expectation of approval of bitcoin spot ETFs. If the Bitcoin spot ETF is rejected by the US regulator again, the current round of Bitcoin rally may come to an end and continue to pull back. As a result, many speculators are currently inclined to take profits, and the virtual currency market has retreated.
The Bitcoin spot ETF application journey has been a tortuous one
The tortuous process of applying for a Bitcoin spot ETF in the U.S. can be traced back to 2013 when the twin brothers of billionaire Winklevoss filed an application. However, it has been repeatedly rejected by the SEC, mainly because investors who are worried about the risk of the bitcoin market.
Since last year, a number of financial institutions such as BlackRock have submitted applications for Bitcoin spot ETFs, which has attracted market attention. According to incomplete statistics, 13 applicants have held 24 meetings with the SEC to discuss the relevant details of Bitcoin spot ETFs.
Recently, Bloomberg ETF analyst Eric Balchunas said: "If we don't see a spot Bitcoin ETF approved in the next two weeks, it may be because the SEC wants to take longer to decide on this matter." ”