The cryptocurrency market witnessed a staggering $230 million liquidation in leveraged positions over the past 24 hours, triggered by a surge and subsequent drop in Bitcoin’s (BTC) price.
The leading cryptocurrency, Bitcoin (BTC), experienced a high-voltage rollercoaster ride, initially climbing to nearly $48,000 before retracting to the $45,000 range.
Liquidations Strike Crypto Market
The tumultuous period began with a security breach at the US Securities Exchange Commission (SEC). A false message posted on the SEC’s official X account (formerly Twitter) erroneously indicated the approval of a spot Bitcoin ETF.
“Today the SEC grants approval for Bitcoin ETFs for listing on all registered national securities exchanges. The approved Bitcoin ETFs will be subject to ongoing surveillance and compliance measures to ensure continued investor protection,” SEC’s tweet read.
This misinformation caused a flurry of activity, propelling Bitcoin’s price to nearly $48,000. However, the revelatory turn came when the SEC clarified the tweet as a fabrication, leading to a sharp decline in Bitcoin’s value.
The impact of this price fluctuation was significant. Over $90 million in leveraged Bitcoin positions became victims of liquidations, contributing to a total of $230 million in liquidations across various cryptocurrencies. This event was marked by the predominance of long-position closures, which accounted for $140 million. Along with longs, $91 million in short positions also faced liquidations.
Bitcoin is now trading at $44,622, down 2.96% from the previous day. This market episode reached a multi-week high in volatility, with the annualized Bitcoin volatility currently standing at 50.97%.
Bitcoin at Risk of Price Correction
Anticipation for the potential approval of spot Bitcoin ETFs has been mounting, affecting market sentiment. Despite this, a CryptoQuant report shared exclusively with BeInCrypto cautioned of the persisting risk of sudden price corrections.
“Although demand prospects seem strong ahead of the spot ETF approval, on-chain data is signaling unrealized profit margins still remain high as Bitcoin prices have continued to increase. High unrealized profit margins have preceded price corrections in the past. If prices were to increase further after the ETF approval, it would put Bitcoin at a higher risk of correction,” analysts at CryptoQuant explained.
Likewise, analysts from QCP Capital remarked on the volatility. They believe that the recent market’s reaction potentially indicates that a Bitcoin ETF approval may already be priced in.
“The initial reaction to the ‘approval’ was muted with BTC being unable to trade out of the resistance area. We take this as a warning sign that an approval is mostly priced in and there may not be a huge rally post the approval,” analysts at QCP Capital said.
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