The crypto market has experienced a significant plunge, witnessing one of the most substantial sell-offs this year. The torchbearer of this downward trek, Bitcoin (BTC), saw its value plummet 7% in 24 hours, driving it down to prices untouched since June. The market witnessed an astonishing figure of $1 billion worth of liquidations. At the time of documentation, the largest virtual currency, evaluated on market value, was trading near $26,400 with a disappointing dip to $25,234 on Thursday. However, it’s not all about Bitcoin as the altcoins didn’t perform much better. Ether (ETH) and Solana’s SOL experienced considerable drops of 6% and around 5%, respectively.
An interesting mixture of market structure variation and mounting liquidations are being attributed to this sudden downfall, rather than a particular fundamental catalyst. According to Lewis Harland, a trader at Decentral Park Capital, the descent below the $28,500 mark ensued in substantial volumes of longs being liquidated, coupled with spot selling.
Additionally, there are developments brewing in the business landscape with creditors of the insolvent crypto firm Celsius preparing to vote on the firm’s plan to trade off its assets to the Fahrenheit consortium. If the vote passes, creditors could expect to recover approximately 67%-85% of their holdings. The unfolding of these events occur within a year of Celsius’ bankruptcy and amidst turmoil in the crypto markets. Alex Mashinsky’s arrest on fraud charges – which he has denied – adds another unsettling layer to this narrative.
In another corner of the market, securities regulators are reportedly on the brink of greenlighting ether futures ETFs for the U.S. According to Bloomberg, several firms have submitted applications to list these exchange-traded funds, which would carry the derivative contracts tied to Ether. However, for this to be actualised, it would require a final approval from the U.S. Securities and Exchange Commission. As of now, U.S. ETFs that hold crypto derivatives already exist, for example, bitcoin futures ETFs. However, anticipation for the approval of ETFs carrying bitcoin itself is mounting, with Wall Street powerhouses like BlackRock eager to join in.
Lastly, a recent uptick in the highest daily slippage on a single market order since September 2022 signals deteriorating liquidity conditions in the market. As the dust of the mixed responses settles, the future remains to be seen. But one thing is for certain, the market is nothing if not unpredictable.
Source: Coindesk
