The crypto market is down today as the catalysts that propelled Bitcoin and altcoins to 2023 highs begin to lose their positive impact on the market.
Price action across the crypto market remains tilted to the downside as investors and money managers begin to digest the potential fallout if the United States Securities and Exchange Commission chooses to delay the current spot Bitcoin
$34,829 exchange-traded fund (ETF) applications on Nov. 17.
Spot ETH and BTC ETF euphoria could be waning
Market sentiment boomed due to optimism about a potential spot Bitcoin ETF approval happening in November. The euphoria helped to send Bitcoin price to an 18-month high above $38,000. However, the euphoria seems to be easing, with BTC price dropping nearly 2% for the week of Nov. 17.
While the market was eagerly awaiting positive spot ETF news this week, this seems unlikely, with the SEC already delaying Hashdex’s application for a spot Bitcoin ETF conversion on Nov. 15. And while BlackRock does not believe the SEC has any legitimate reason not to approve a cryptocurrency spot ETF, the SEC seems poised to delay.
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On Nov. 15, the SEC delayed a decision on Grayscale’s Ether futures ETF. Some analysts believe the 19b-4 form submitted by Grayscale is a potential “trojan horse” for the agency.
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XRP and altcoins sell-off after a fake ETF filing
The decline in the crypto market coincides with the SEC being expected to review a handful of pending spot Bitcoin ETF applications.
Notably, the securities regulator must decide on applications from Hashdex and Global X ETFs by Nov. 17. The SEC must also decide on Franklin Templeton’s Bitcoin ETF application by Nov. 21. Failing to do so would push the deadline to 2024.
The market anticipates another delay, according to James Edwards, a crypto analyst at Australian fintech firm Finder.
Edwards mentioned a fake BlackRock XRP
$0.67 trust filing that caused extreme price swings in the XRP markets and prompted an investigation request to be sent to the United States Department of Justice. Edwards believes this event will hurt the chances of launching a spot Bitcoin ETF in the U.S. because it supports the SEC’s claims of price manipulation in the crypto industry.
For now, traders are likely securing profits at the current multimonth-high prices in the crypto market because of this potentially long wait.
Futures liquidations send the crypto market lower
The decline across major cryptocurrencies has led to a rush of liquidations across the derivatives market.
In the past 24 hours alone, over $161.4 million in long positions have been liquidated across the crypto market, with $54 million being wiped out in the previous four hours. Crypto market prices are negatively affected when long derivative positions are liquidated without buying pressure from trading volume.
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In the short term, the cryptocurrency market will continue to navigate multifaceted challenges, and the ebb and flow of various economic and regulatory factors will undoubtedly shape its trajectory for the foreseeable future.
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