Crypto Market Sees Big Liquidity Approval As BTC ETF From August 2023: Bitfinex

BTC The crypto market witnessed one of its biggest liquidations on January 3, 2024, as the United States Securities and Exchange Commission (SEC) threatened to ban all spot bitcoin exchange-traded funds (ETFs).

BTC's collapse triggered the biggest wave of liquidity since August 2023, with long and short positions totaling $591 million and $94 million, respectively, according to a report by cryptocurrency exchange Bitfinex.

The biggest liquidation since August 2023

Bitcoin's 11 percent decline earlier this month saw the asset plummet from $45,400 to $40,400 in a matter of hours. Despite the digital asset's quick recovery and rally to $47,000 yesterday, the pair posted its third-biggest long run since the November 2022 bear market low.

Ironically, the crash occurred on the same day as the 15th birthday of the Genesis block, which is being celebrated globally.

The incident was triggered by a report from crypto-financial service platform Matrixport, which suggested that the SEC may ban or delay all Bitcoin ETF applications. Since the report, more than $1.8 billion of open interest positions have been eliminated through forced liquidation or large sales.

Bitfinex such growth is healthy and predictable.

As noted in the 2024 Bitfinex Alpha Special Issue, we expect the market to be bearish and likely to go long in the early months of this year. It's hard to say whether there will be further setbacks, but we believe these are healthy for the market and that excessive bullishness is ‘resuming' with the currency, he said.

Bitcoin ETF Approval Looms

Despite Matrixport's report, Bitcoin ETF experts and the crypto community are confident that the applications will be approved this week. The filing of an amended 19b-4 filing by the filers on Jan. 5 has reinforced the community's belief that the SEC will soon announce its decision on the products.

Bitcoin is rallying on hopes that it could close Q4 2024 at 56.5%, its biggest quarterly gain since 2019.

In addition, long-term BTC holders are anticipating the potential price reaction. In the year December 27, 2023, saw the fifth highest Coin Days Destruction (CDD) value in the last 18 months, indicating strategic positioning by this set of investors.