Crypto markets plunged today, leading to over $160 million in long liquidations, amid concerns that the SEC may delay its decision on all pending BTC ETF spot applications.
Price action in the cryptocurrency market remains tilted to the downside as investors and fund managers begin to wake up to the potential consequences if the SEC chooses to delay the current spot Bitcoin ETF application.
XRP and altcoins sold off after XRP ETF application turned out to be fake
The cryptocurrency market decline comes during a week when the U.S. Securities and Exchange Commission (SEC) is expected to review several pending spot bitcoin ETF applications.
Notably, the securities regulator must make a decision on Hashdex’s application, and if the world fails to make a decision, the deadline will be pushed back to 2024.
James Edwards, a cryptocurrency analyst at Australian fintech firm Finder, said the market expected further delays.
The analyst mentioned that BlackRock's false declaration of the XRP ETF caused drastic fluctuations in the XRP market price and prompted an investigation request to the U.S. Department of Justice. He believes that this incident will affect the chances of launching a Bitcoin spot ETF in the United States because it supports the SEC's allegations of price manipulation in the cryptocurrency industry.
For now, since the wait is likely to be long, traders may be able to take profits at the current multi-month highs in the cryptocurrency market.
Enthusiasm for Bitcoin and Ethereum ETFs May Be Waiting
Market sentiment exploded on optimism about a potential spot Bitcoin ETF.
While the market is ready to approve an ETF by November 17, this seems unlikely as the SEC delayed Hashdex’s Bitcoin ETF spot conversion application on November 15. Although BlackRock believes the SEC has any good reason not to do so, the SEC appears ready to delay.
On November 15, the SEC postponed its decision on Grayscale’s Ethereum futures ETF. Some analysts believe that the Form 19b-4 submitted by Grayscale is a potential “Trojan Horse” for the agency.
Cryptocurrency market falls as futures contracts blow out
The decline in major cryptocurrencies has triggered a wave of liquidations in the derivatives market.
In the last 24 hours alone, the cryptocurrency market has seen over $160 million in long positions liquidated, with $144.3 million lost in the last 12 hours. When long derivatives positions are liquidated without volume buying pressure, cryptocurrency market prices are negatively impacted.
Despite today’s drop in the cryptocurrency market, certain altcoins are still performing well.
In the short term, the cryptocurrency market will continue to face challenges on multiple fronts, and the ebb and flow of various economic and regulatory factors will certainly shape its trajectory for the foreseeable future.
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