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Bitcoin Price Falls as $160 Million Long Liquidations Stunt Bull’s Momentum

Last Updated November 17, 2023 11:22 AM
Teuta Franjkovic
Last Updated November 17, 2023 11:22 AM

Key Takeaways

  • A surge in futures liquidations triggered a significant decline in the cryptocurrency market.
  • The SEC’s delay in reviewing existing spot Bitcoin ETF applications is contributing to the market downturn.
  • The false BlackRock XRP trust filing is also adding to the downward trend. 

The cryptocurrency market experienced a significant decline after a surge in futures liquidations.

These liquidations occur when traders cannot meet margin requirements, forcing them to sell their positions at a loss. The sudden increase in selling pressure overwhelmed the market, causing Bitcoin prices  to fall more than 3% in 24 hours.

Futures Liquidations Trigger Sell-Off

The downturn in major cryptocurrencies has triggered a wave of liquidations in the derivative market.

In the last 24 hours, long positions totaling over $160 million  have been liquidated across the crypto market, with $144.3 million getting wiped out in the preceding 12 hours. The negative impact on crypto market prices occurs when long derivative positions are liquidated without the corresponding buying pressure from trading volume.

BTC long liquidations
Credit: Coinglass

Despite a downturn in the overall crypto market today, specific altcoins  have exhibited strong performance.

In the short term, the cryptocurrency market is expected to grapple with complex challenges, with the ebb and flow of diverse economic and regulatory factors playing a crucial role in shaping its trajectory in the foreseeable future.

Crypto Market Plummets Following Fake XRP ETF Filing

The crypto market is also experiencing a downward trend as investors and fund managers contemplate the potential consequences of a potential delay by the SEC in reviewing existing spot Bitcoin ETF applications. XRP and other altcoins see a decline following a fraudulent ETF filing.

This market downturn coincides with a crucial week when the U.S. Securities and Exchange Commission (SEC) is slated to evaluate several pending spot Bitcoin ETF applications. Notably, decisions on the application from Global X ETF are expected by November 17, while Franklin Templeton’s Bitcoin ETF application is due by November 21. Failure to meet these deadlines could extend the decision to 2024.

Analysts anticipate another delay  pointing to a false BlackRock XRP trust filing that caused significant price fluctuations  in the XRP markets and triggered an investigation request to the United States Department of Justice.

This incident may hinder the approval of a spot Bitcoin ETF in the U.S. by supporting the SEC’s concerns about price manipulation in the cryptocurrency industry.

Given the potential for a prolonged waiting period, traders appear to be securing profits at the current multi-month high prices in the cryptocurrency market.

ETH and BTC Spot ETF Buzz Subdued 

Market optimism surged at the beginning of November amid hopes for a potential approval of a Bitcoin exchange-traded fund (ETF), propelling the price of Bitcoin to 18-month highs surpassing $38,000. However, this enthusiasm appears to be waning, as Bitcoin experienced a 4% drop on Nov. 16, attributed to low liquidity at higher levels.

BTC Historical Price
Credit: Newhedge

Although the market anticipated an ETF approval by Nov. 17, the likelihood has diminished. The SEC already postponed Hashdex’s application  for a spot Bitcoin ETF conversion on Nov. 15. Despite BlackRock’s confidence that the SEC lacks valid reasons to reject a cryptocurrency spot ETF, signs suggest the SEC is leaning towards a delay.

On Nov. 15, the SEC deferred a decision on Grayscale’s Ether futures ETF. Some analysts view Grayscale’s 19b-4 form submission as a potential “trojan horse” strategy employed by the agency.

Be it as it may, the crypto market is facing a period of uncertainty and volatility due to a combination of factors, including the recent wave of liquidations in the derivative market, the potential delay in the approval of spot Bitcoin ETFs, and the false BlackRock XRP trust filing. While some altcoins have shown resilience, the overall trend is downward. Investors should be cautious and carefully consider their investment strategies in this challenging environment.

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