Bitcoin fell sharply around 3pm today. The largest cryptocurrency fell nearly 10% to $40,750. Experts debate the reasons for this decline, but two important reasons stand out.
SEC’s Possible ETF Approval… Or Rejection…
As it is known, the US Securities and Exchange Commission (SEC) has at least until January 10 to decide on the ETF product affiliated with ARK Invest-21Shares. The approval decision will focus on the ARK-21Shares ETF. The SEC, on the other hand, does not want this and wants to treat all participants equally and approve or reject everyone at the same time. Therefore, the decisions may have been leaked to certain groups.
“Sell the News” Theory
While the rejection of the ETF application could cause a short-term decline in Bitcoin, some experts pointed out that the approval decision could also lead to a decline. This theory, known in financial circles as “buying expectations and selling news”, generally refers to the decline experienced due to the loss of expectations after an event. Bitcoin, which has risen so far following the SEC’s potential ETF approval decision, may fall even if the demand is accepted. Vetle Lunde, senior analyst at crypto research company K33 Research, also commented yesterday that the “selling news” scenario could be one of the most likely options once confirmed.
The yes or no decision and the associated “buy the expectation, sell the news” theory are currently considered the most likely option against the decline.
“ETFs Will Be Rejected” Report from Matrixport
Meanwhile, Matrixport, which provides services to businesses, also claimed that the ETF was rejected yesterday. This report was published yesterday but distributed today. “We expect the SEC to reject all applications in January,” the report said. Matrixport’s ETF forecast caused a stir as its 2023 price prediction was almost accurate.
480 Million Dollars Was Liquidated in the Last Hour
The decline led to $480 million in futures positions being liquidated in the last hour and $536 million in the last 24 hours. Of this, $458 million was long positions and $18 million was short positions. The value of positions liquidated within 24 hours reached 598 million dollars. Of this, $544 million was long positions and $54 million was short positions.
