Bitcoin's $45K Plunge: The Impact of Fake Spot Approval News on the Market

• Bitcoin's Wild Ride Following False ETF Approval News
• Bitcoin's Initial Rally and Subsequent Decline
• Impact on Derivatives Trading
• Current Bitcoin Status and Future Implications
• Insights from Crypto Market Experts

Bitcoin's Wild Ride Following False ETF Approval News

Bitcoin$42,260 -0.64% (BTC) experienced dramatic fluctuations during Tuesday's trading session due to a misleading social media post by the U.S. Securities and Exchange Commission (SEC). The post erroneously announced the official approval of spot bitcoin exchange-traded funds (ETF), causing confusion among market participants.

Bitcoin's Initial Rally and Subsequent Decline

Bitcoin first surged 2.5% to a new 19-month high of $47,900, immediately after the alleged SEC's account shared on X (formerly Twitter) about the bitcoin ETF approval. This drew considerable attention, with cryptocurrency enthusiasts mistakenly celebrating what appeared to be a milestone decision. However, the cryptocurrency then fell dramatically by nearly 6% reaching a low of $45,100, when it was revealed that the SEC's account had been hacked and SEC Chair Gary Gensler denied the earlier announcement.

Impact on Derivatives Trading

The erratic price behavior resulted in the liquidation of over $50 million worth of derivatives trading positions on cryptocurrency exchanges within a single hour, according to data from CoinGlass. Liquidations typically take place when an exchange forcibly closes a trader's open position using borrowed funds due to a loss of margin.

Current Bitcoin Status and Future Implications

As of the most recent update, Bitcoin was trading just under $46,000, a decline of approximately 2% in the last 24 hours. This incident marked the second time in a day that a false social media post had sparked considerable market volatility. Earlier on Tuesday, Dogecoin$0.091 -0.42% (DOGE) saw a jump of up to 9% following a post about the token's mascot's death, which was later proven to be false.

Insights from Crypto Market Experts

Alex Krüger, co-founder of Asgard Markets, put forth that these events indicated that Bitcoin might not surge as much as expected when the actual ETF approval announcement comes. According to him, The faux ETF news revealed that BTC's upside is clearly capped until we witness real ETF inflows. He concluded his sentiment by suggesting it might be time for Ethereum$2,315 -2.42% (ETH) to gain momentum.

Edited by Jonathan Stoker