Bitcoin (BTC) experienced a 4.7% drop, falling below the $26,000 mark in the past 24 hours,
following the announcement of the SEC’s decision to delay several filings for a US spot ETF until October.
The SEC cited insufficient time for evaluation as the reason behind the delay, affecting applications from Blackrock, WisdomTree, Fidelity, Bitwise, VanEck, Valkyrie, and Invesco.
This news sent shockwaves through the cryptocurrency market on Thursday, marking Bitcoin’s second significant drop in two weeks.
Earlier in the week, Bitcoin had seen a substantial increase in value, driven by a drop in US bond yields and a small victory for Grayscale in its dispute with the SEC.
This surge had represented Bitcoin’s most significant daily rally in five and a half months, but it seems that those who had been hopeful about the ETF approval are now feeling cautious.
Rich Rosenblum, co-founder and president of GSR, referred to this week as a game of “ETF approval probability ping pong.
” He explained, “When an ETF gets approved, it’s a game changer for the industry, so it’s no surprise people are buying the news.
But in the short term, it also opens up a lot of liquidity to exit, that would otherwise be locked up in GBTC.”
Although the total long liquidations for Bitcoin’s recent drop were milder compared to the mid-August selloff, totaling over $100 million,
it still had an impact. Most of these liquidations occurred within a 12-hour period, primarily on OKX with $45 million and Binance with a total of $37 million as of 4:00 am ET.
This reversal in Bitcoin’s price attributes to the prevailing negative sentiment lingering from 2022, exacerbated by the SEC’s cautious stance.
Mark Connors, 3IQ’s head of research, described it as a “show me” market that seeks finality regarding the US spot BTC ETF.
Connors pointed out several positive factors on the horizon, including Bitcoin’s ability to deliver substantial gains relative to potential losses, referred to as “positive skew.”
Additionally, a looming halving event, improved energy efficiency, and rising transaction fees are contributing to a generally positive sentiment in the cryptocurrency market.
As a result of these factors, Bitcoin’s price action remained relatively stable throughout the week.
