Traders betting against higher Bitcoin (BTC) prices have lost over $100 million in the last 24 hours as expectations of a spot Bitcoin exchange-traded fund (ETF) approval in the US approaching the finish line.
BTC rose as much as 9% on Monday but then gave up some gains as prices rose above $47,000 for the first time since March 2022. Traders on the crypto exchange OKX suffered the most losses with $84 million, followed by Binance with $71 million.
Open interest, or the number of unsettled futures contracts, has increased by over 8% in the last 24 hours, suggesting that traders have opened more bets following the liquidation event, likely anticipating continued volatility.
Liquidation is the case where an exchange forcibly closes a trader's leveraged position due to a partial or complete loss of the trader's original margin. This happens when a trader is unable to meet the margin requirements for a leveraged position (does not have sufficient funds to keep the trade open).
Large liquidations can signal the local high or low of a steep price move, potentially allowing traders to position accordingly.
Such data is beneficial for traders because it serves as a signal that leverage is effectively being washed out of popular futures products – and serves as a short-term indication of a decline in price volatility.
Monday's market moves came as potential issuers from BlackRock (BLK) to Grayscale filed their offering fees with the U.S. Securities and Exchange Commission (SEC) on Monday. This marked one of the final steps before the first-ever Bitcoin ETF can launch US
Thirteen proposed ETFs are awaiting SEC approval, and the battle for customers already appears to be heating up – with some issuers charging no fees for the first six months or $5 billion in assets under management (AUM).
A final decision on the approvals or denials is expected on Wednesday. Meanwhile, SEC officials are said to have sent comments to a number of potential issuers addressing minor details in the amended S-1 forms, which are expected to be filed on Tuesday, a source familiar with the matter told CoinDesk.