Bitcoin’s Roller Coaster Ride
The crypto market has been experiencing heightened volatility, resulting in over $215 million in liquidations over the past 24 hours. Bitcoin, after reaching a multi-year low, made a remarkable comeback, with a 5% increase in the last day. CoinGecko reports that Bitcoin’s price reached $43,116, successfully recovering from the losses incurred during the weekend. This sudden surge followed a significant dip from $44,000 to $40,750 within a 24-hour period starting on December 11. However, the cryptocurrency managed to regain the $43,000 range in the following week.
The increased volatility in Bitcoin can be observed through the 30-day and 60-day moving averages, which have doubled, reaching levels not seen in over four-and-a-half years, according to 99bitcoins.
Ethereum’s Similar Pattern
Ethereum also witnessed a similar volatile pattern. It experienced a 5% drop and subsequent rebound, currently trading at $2,250. The cryptocurrency suffered a 9% crash within 24 hours after reaching year-to-date highs near $2,375 on December 11, further emphasizing the recent surge in market volatility.
During this period of market turmoil, more than 100,000 traders faced liquidation, with the total value of their positions exceeding $215 million within the past 24 hours. Surprisingly, long positions accounted for over 51% of the liquidated assets, indicating that a majority of traders faced losses. However, short positions bucked the trend, representing nearly two-thirds of the total liquidations.
Bitcoin’s dominance over the overall crypto market capitalization has risen to over 52%, its highest level since April 2021. This surge in dominance aligns with speculation about the U.S. Securities and Exchange Commission (SEC) potentially approving the first spot Bitcoin exchange-traded fund (ETF). Unlike existing futures-based Bitcoin ETFs, a spot ETF would directly invest in and hold BTC, exerting bullish pressure on Bitcoin’s supply.
Various issuers, including Ark Invest, 21Shares, Wisdomtree, and BlackRock, have submitted updated spot Bitcoin ETF applications to the SEC on December 18. Prominent investors and market analysts believe that these applications will likely be approved in early 2024, potentially impacting the market in significant ways.
“Bitcoin has the potential to skyrocket to $1 million within a matter of days to weeks following the approval of a spot exchange-traded fund (ETF).” – Samson Mow, CEO of Jan3
Samson Mow, CEO of Jan3, anticipates that Bitcoin’s approval for a spot ETF will lead to an influx of institutional capital, causing a surge in demand for the limited available Bitcoin on exchanges. He asserts that a drastic increase in Bitcoin’s value will occur due to “a torrent of money seeking to purchase the limited available Bitcoin on exchanges.”
