Bitcoin experienced an unexpected downward spiral, dropping approximately 10% within a brief three-hour window, causing the price to slip to around $42,300 from its previous $45,500. This significant shift drew attention due to its rapid and substantial impact on the market.
Market analysis from CoinGlass revealed the aftermath of this downturn, indicating staggering figures of liquidations. Over $2.7 million of one-hour-long liquidations, coupled with $116 million and $129 million of liquidations over four-hour and 24-hour periods, respectively, added to the crypto turmoil.
Scott Melker, a crypto investor, attributed this sudden price plunge to a “leverage flush.” He suggested that this event acted as a corrective mechanism, eliminating overleveraged positions that were vulnerable to market fluctuations.
The trigger for this market upheaval was tied to a report released by Matrixport, a crypto financial services firm. The report forecasted a potential rejection of Bitcoin ETF applications by the U.S. Securities and Exchange Commission (SEC), contradicting their prior indications of a more positive outcome. Melker dismissed the report’s credibility, suggesting it was of little value.
The swift change in Matrixport’s perspective attracted criticism from market participants. Stack Hodler, a prominent crypto influencer, expressed skepticism and hinted at potential market manipulation. Venting on X, he highlighted Matrixport’s conflicting reports, insinuating a manufactured decline to liquidate Bitcoin long positions before a presumed ETF approval.
Yesterday’s optimistic outlook contrasted sharply with today’s stark prediction, prompting skepticism within the crypto community regarding the sudden shift in Matrixport’s stance and its possible influence on market movements.
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