Eagled-eyed traders would have seen a decent dip-buying opportunity when bitcoin plummed to two-week lows for little-to-no reason.
The world’s largest cryptocurrency took the wild downside ride after crypto-focused financial services platform Matrixport published an article titled ‘Why the SEC Will Reject the Upcoming Spot BTC ETF Applications’.
Matrixport contended that the spate of applications filed by BlackRock (NYSE:BLK), VanEck, Grayscale, Ark Invest and others to have their bitcoin-based exchange-traded funds (ETFs) approved for trading “fall short of a critical requirement that must be met” before the Securities and Exchange Commission (SEC) gives the nod.
Matrixport Author Markus Thielen was within his right to lay down his thesis, but the market’s extreme reaction to an innocuous piece of research was a true red-faced moment.
It underscored the fragility at the centre of the crypto markets, where one article, or one Elon Musk Tweet can have such a strong influence on spot prices.
In fairness, bitcoin has steadily recovered from the hoopla, having recovered nearly 3% throughout the European trading window, and further daily gains are a distinct possibility.
At the time of writing, the BTC/USD pair was trading above $44,000.
Binance’s order does show a moderately strong sell wall at $45,000, which could act as a resistance wall in the short term.
The bizarre past 24 hours was a pox on long-bitcoin holders on the futures market, with nearly $140 million worth of positions liquidated before the market stabilised.