Bitcoin Slumps Below $36K: $340M Liquidated Amid Halted Crypto Rally

• Bitcoin's Price Rollercoaster Continues with a 5% Drop for the Session
• Trend of Sell Orders Wreaks Havoc
• Impact on Derivatives Traders
• ETH, SOL, and LINK Follow BTC's Downward Trend; AVAX Stands Out
• CoinDesk Market Index Performance
• Delay in Spot Bitcoin ETF Decision Dampens Momentum
• Unrealized Optimism for Spot ETFs

Bitcoin's Price Rollercoaster Continues with a 5% Drop for the Session

The unpredictability of bitcoin's (BTC) price was on full display this past week, as a rally on Wednesday swiftly transitioned into a downturn on Thursday. This resulted in bitcoin trading under $36,000, a 5% drop for the session. The day prior had witnessed a promising surge, with the popular cryptocurrency edging towards the $38,000 mark, a level not reached in over a year and a half.

Trend of Sell Orders Wreaks Havoc

In the pattern that has become all too familiar during this six-week upward trend, a large number of sell orders loomed near a rounded figure. When bitcoin neared $38,000, these sell orders dominated, driving the price downwards. This triggered a cascade of liquidations of leveraged long positions, subsequently sending the price spiralling even lower.

Impact on Derivatives Traders

Falling victim to the volatile two-day ride of the crypto market, derivatives traders experienced a hefty blow. Over this period, around $340 million of leveraged positions were liquidated, according to CoinGlass data.

ETH, SOL, and LINK Follow BTC's Downward Trend; AVAX Stands Out

Most cryptocurrencies mirrored bitcoin's downward trajectory throughout the day. Ether (ETH) diminished by 4% over the past 24 hours, settling at $1,960. Similarly, Solana$104 5.03%'s (SOL) and Chainlink$15.6 -4.61%'s (LINK) tokens experienced declines of 6% and 9% respectively. The sole anomaly was Avalanche's native token (AVAX), which extended the previous day's double-digit rally with a further 7% gain.

CoinDesk Market Index Performance

The CoinDesk Market Index (CMI), which monitors the performance of nearly 200 cryptocurrencies, also fell by 4% during the day.

Delay in Spot Bitcoin ETF Decision Dampens Momentum

The U.S. Securities and Exchange Commission (SEC) on Wednesday postponed a decision on the spot BTC ETF application by HashDex. This delay only heightens the possibility that no such proposals will be approved during this calendar year. Crypto market analytics firm, K33 Research, recently pointed out that a lack of decision from the SEC could stall momentum in the crypto market until the next deadline in early 2024.

Unrealized Optimism for Spot ETFs

Enthusiasm regarding the potential for spot ETFs, coupled with expected significant institutional and retail inflows, had previously driven bitcoin from $25,000 in September to just under $38,000. However, this recent SEC delay has curbed this optimism. The market now impatiently awaits news from Franklin$0.0015 -3.24% Templeton, who faces a decision deadline tomorrow. Nonetheless, the consensus anticipates yet another delay from the SEC.

Edited by Jonathan Stoker