Bitcoin slipped 8% on Wednesday as concerns emerged over the expected approval of a spot Bitcoin ETF (BTC).
The plunge wiped out the entire uptrend from Jan. 1 and triggered the liquidation of $500 million worth of positions on derivatives exchanges.
“The likelihood of ETF adoption became increasingly slimmer and the market experienced a stalemate,” options analyst GreeksLive wrote on of the market.”
Last week, Retuers reported, citing sources, that a Bitcoin ETF could be approved as early as “Tuesday or Wednesday.”
Financial services firm Matrixport dismissed optimistic expectations, saying: “We believe all applications fall short of a critical requirement that must be met before the SEC approves. This could be fulfilled by the second quarter of 2024, but we expect the SEC to reject all proposals in January.”
After hitting a morning high of $45,500, Bitcoin fell as low as $40,550 before rallying back to $42,200. Open interest fell by $2 billion due to liquidations, the declining value of BTC, and traders reducing their exposure on both the long and short sides.