On Wednesday, Bitcoin fell 8% as investors started to get nervous about the expected approval of a spot bitcon (BTC) ETF.The whole upward run that started on January 1st was retraced by the decline, which prompted the liquidation of positions totaling $500 million on derivatives markets.
“The likelihood of the ETF’s passage became less and less likely, and the market saw a stalemate,” options analyst GreeksLive wrote on X. “Weakness in crypto mining stocks, and the sell-off in several crypto-related U.S. stocks, also reinforced the market’s skepticism.”
Last week, Retuers reported that a bitcoin ETF could be approved as soon as “Tuesday or Wednesday,” citing sources. Financial services firm Matrixport rebuffed optimistic expectations, saying: “We believe all applications fall short of a critical requirement that must be met before the SEC approves. This might be fulfilled by Q2 2024, but we expect the SEC to reject all proposals in January.”
Bitcoin saw a morning high of $45,500, then fell as low as $40,550 before rising once more to $42,200.Liquidations, the falling value of Bitcoin, and traders lowering their long and short positions were the reasons behind the $2 billion decline in open interest.