On January 3, 2024, Bitcoin (BTC) suffered a sudden 10% decline, stunning the crypto world and raising eyebrows among investors worldwide. Several factors appear to have caused this downward move. According to the research team at K33 Research, the answer is actually quite simple.
You must have this Bitcoin price for your tax return in 2024
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Bitcoin news
Matrixport isn't the culprit, is it?
The specific reason for the Bitcoin decline is attributed by many to the publication of a report by Matrixport. This expresses the expectation that the… Securities and Exchange Commission (SEC) the first Bitcoin spot Exchange-traded fund (ETF) will not agree. The majority of the market seems to have expected nothing other than mass approval for some time, at the latest on January 10th.
However, Jihan Wu, co-founder of Matrixport, points out that the report is most likely not responsible for the crash. “It is unrealistic to believe that a report from Matrixport could bring down the trillion-dollar market,” he wrote Wu on X (formerly Twitter).
“We also saw an unexpected decline in crypto stocks on consecutive trading days while the price of Bitcoin remained stable,” Wu added. “These events that preceded Markus Thielen’s report seemed to have less impact and received less attention.”
The Bitcoin market evaporates $560 million
Vetle Lunde, senior analyst at K33 Research, said the market is simply overheated and overloaded. This would have left the market very vulnerable to downward pressure.
“Market leverage was very high before the crash, with long positions being the main aggressor, as evidenced by funding rates and futures premiums rising to annual rates of over 50%. This left the market extremely exposed to downside volatility.”
Bitcoin’s decline wiped out nearly $560 million in long derivative positions. This is according to data from CoinGlass, which also shows that it is the highest liquidation amount in at least three months. “It’s a typical liquidation wave for long positions,” Lunde said.
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