Bitcoin Dips 5% to Under $36K as Crypto Rally Runs Into Wall, Liquidating $340M in 2 Days

The SEC delaying a decision about spot BTC ETFs could leave the market without a catalyst until early January, K33 analysts said this week.

AccessTimeIconNov 16, 2023 at 9:44 p.m. UTC
Updated Mar 8, 2024 at 5:16 p.m. UTC

The bitcoin (BTC) yo-yo of the past week continued on Thursday, with Wednesday's rally completely reversed, leaving the crypto down 5% for the session and trading under $36,000.

It was just 24 hours ago that bitcoin was surging and within a few dollars of crossing the $38,000 level for the first time in more than 18 months.

As has been a familiar trend during the upswing over the past six weeks, a wave of sell orders was likely sitting close to a round number. When bitcoin approached $38,000, the sell orders took over, sending the price lower. That, in turn, triggered liquidations of leveraged long positions, sending the price hurtling further downward.

Indeed, the crypto market's two-day rollercoaster hit derivatives traders heavily, liquidating some $340 million of leveraged positions over the period, CoinGlass data shows.

Total crypto liquidations per day (CoinGlass)
Total crypto liquidations per day (CoinGlass)

SOL, LINK give up gains; AVAX extends rally

Most cryptocurrencies followed bitcoin lower during the day, with ether (ETH) dropping 4% over the past 24 hours to $1,960. Solana's (SOL) and Chainlink's native token (LINK) declined 6% and 9%, respectively.

Fading the plunge today was Avalanche's native token (AVAX), extending yesterday's double-digit rally with another 7% gain.

The CoinDesk Market Index (CMI), which tracks the performance of a basket of almost 200 cryptocurrencies, dropped 4% during the day.

Spot bitcoin ETF delay slows momentum

The U.S. Securities and Exchange Commission (SEC) Wednesday delayed a decision about HashDex's spot BTC ETF application, increasing the odds that it won't approve any such vehicles this year.

Crypto market analytics firm K33 Research noted earlier this week in a report said that a lack of an SEC decision this week could halt momentum in the crypto market until the next deadline early in 2024.

Heightened optimism about spot ETFs and what are hoped to be sizable institutional and retail inflows helped propel bitcoin from $25,000 in September to just shy of $38,000. There still could be news this week as Franklin Templeton has a decision deadline of tomorrow. Few, though, are expecting anything except another delay from the SEC.

Edited by Stephen Alpher.


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Krisztian  Sandor

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.