It’s been just reported the fact that more Bitcoin ETF rejection predictions are rocking the crypto markets. Check out the latest reports about this below.
Bitcoin ETF rejection predictions rock the market
Bitcoin (BTC) and other cryptocurrencies had a strong start this year, but they are now facing a sharp correction.
This correction has led to over $670 million in liquidations within just a few hours.
According to Coinglass, a crypto exchange data platform, most traders who were positioned long have suffered the largest losses.
Bitcoin’s value fell by more than 8% from $45,469 to $41,805 in just three hours, while Ethereum and other altcoins saw even sharper drops.
It is unclear what has caused the market correction, but it seems to have happened around the same time as a report from Matrixport, a cryptocurrency financial services firm.
The report predicts that the U.S. Securities and Exchange Commission (SEC) will reject applications for spot Bitcoin exchange-traded funds (ETFs). This is contrary to what most people in the market expect.
Matrixport argues that there is no logical reason to believe that SEC Chair Gary Gensler, who has been vocal about the need for tighter regulations on crypto, would vote in favor of an ETF. The report is titled “Why the SEC will REJECT Bitcoin Spot ETFs again.”
Matrixport warned that the markets could be overvalued, citing a significant increase in leverage.
The company advised investors who are bullish and looking to protect their long positions to consider purchasing put options at the $40,000 strike price to hedge against the possibility of a market collapse below the support level.
“Since traders started betting on an ETF approval in September 2023, at least $14 billion of extra fiat and leverage has been deployed into crypto. Some of these flows might be associated with easier macro conditions as the Fed has turned dovish. However, of those $14 billion of additional longs, $10 billion might be related to the ETF approval expectation.”
The notes continued and said the following:
“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. We could see Bitcoin prices declining by -20% very quickly and falling back to the $36,000/$38,000 range.”
