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

Published November 17, 2023 11:22 AM

By Teuta Franjkovic

Long positions of over $160M have been liquidated.

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.

? #Dogecoin has had a modest +5% surge on a mostly flat #crypto market day. It has been aided by $665M in #onchain transaction volume, its highest level in 3 months. There is also a notable amount of $DOGE longs opening as traders bet on prices rising. https://t.co/uFgCCIxih0 pic.twitter.com/DussxIPJN2

— Santiment (@santimentfeed) November 16, 2023

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.

Okay, we're nearing in on deadline dates for 3 spot #Bitcoin ETF applications. I want to get ahead of it because there's a pretty good chance we'll see delay orders from the SEC. Delays WOULD NOT change anything about our views & 90% odds for 19b-4 approval by Jan 10, 2024 pic.twitter.com/LE7sOlHAHM

— James Seyffart (@JSeyff) November 14, 2023

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.

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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About the Author

Teuta Franjkovic

Teuta is a seasoned writer and editor with more than 15 years of experience. She has expertise in covering macroeconomics and technology as well as the cryptocurrency and blockchain industries. She has worked for several publications as a journalist and editor, including Forbes, Bloomberg, CoinTelegraph, Coin Rivet, CoinSpeaker, VRWorld and Arcane Bear. Teuta began her professional career in 2005, working as a lifestyle writer at Cosmopolitan in Croatia. From there, she branched out to several other publications, covering mainly business and the economy. She then turned her attention to the world of cryptocurrency and blockchain, believing that crypto is among the most important inventions in the history of humanity. Her involvement in fintech began in 2014 and she has since lent her expertise in writing, editing and gathering information about the world of crypto, blockchain, NFTs and Web3. An all-round news hound, mentor, editor, and writer, Teuta enjoys teamwork and good communication. She holds a WSET2 diploma and has a thing for chablis, punkrock music and shoes. She also holds a double MA in Political science and Entrepreneurship.

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