Today, Bitcoin had a sharp decline in value, falling as low as $41,454 intraday on the Bitstamp platform.
Analysts in the market blame this abrupt drop on rumours that the Securities and Exchange Commission (SEC) would reject multiple Bitcoin ETF proposals this month.
According to U.Today, Matrixport analyst Markus Thielen thinks that new applications might not satisfy the strict requirements needed to receive the SEC’s highly sought approval.
There was a great deal of expectation that soon after, well-known Wall Street companies like JPMorgan would be listed as approved participants for possible Bitcoin-linked exchange-traded funds (ETFs). Nevertheless, these hopes have been clouded by the prospect of rejection.
Major price collapse on Bitcoin’s birthday
The decline in Bitcoin was replicated across the cryptocurrency market, with double-digit declines seen in other significant digital assets like Ether and Solana.
As Bitcoin marks 15 years since the genesis block was mined, there is a collective depression. The market’s reaction has been mostly pessimistic, in contrast to financial analysts’ earlier positive forecasts.
It’s interesting to remember that Matrixport had previously predicted that Bitcoin would reach $50,000 in value, provided that a Bitcoin Spot ETF was approved. This confidence stemmed from the idea that the adoption of an ETF would validate Bitcoin in institutional portfolios and perhaps bring in significant inflows of fiat money.
Despite this, analyst Eric Balchunas, who questions Matrixport’s sources, is certain that a spot Bitcoin ETF will be approved this month. “We have heard nothing to indicate anything but approval but I want to give the guy benefit of doubt so I’m asking if he has any sources or if he just speculating,” he said in a post on X.
Contrasting views
While some market players link the price crash to the reported rejections of ETFs, other analysts—such as Joe Carlasare—have a different theory.
Carlasare describes the scenario as a “overbought market” going through a “long squeeze,” contending that the sell-off is a normal market correction.
This hypothesis is supported by recent liquidation data from CoinGlass. With a total of $657.23 million in liquidations, almost 190,619 dealers were eliminated in the previous 24 hours.
$14.26 million was the value of the greatest single liquidation order that was reported on Huobi.
