Crypto Market Today Insights

  • Prices took a sharp decline over fears the SEC will delay spot Bitcoin ETF applications.
  • Some investors took profits while those using leverage were liquidated for $160 million.  

During a week when the U.S. Securities and Exchange Commission (SEC) is set to evaluate several pending spot Bitcoin ETF applications, the once positive market sentiment is fluctuating adding to the decline. It is worth mentioning that nothing official has happened yet, the SEC has until November 17th to make a decision on applications from Hashdex and Global X ETFs.

Additionally, the SEC needs to decide on Franklin Templeton's Bitcoin ETF application by November 21st. If they fail to do so, the deadline would be extended to 2024. Many crypto analysts however are  suggests that the market should expect yet another delay. And by what happened in the crypto market today, investors are taking some profits.

Fake BlackRock XRP Trust Spooks Market 

The altcoin markets experienced significant price fluctuations due to a fabricated BlackRock XRP trust filing. This incident has prompted a request for investigation to be submitted to the United States Department of Justice. Once the news broke of a fake filing, the whole event negatively impacted not only prices but also the possibility of launching a spot Bitcoin ETF in the United States.

Chairperson of the SEC, Gary Gensler, has been making allegations of price manipulation within the cryptocurrency industry and this incident helps his cause. As a result, traders and investors were inclined to secure profits at the current multi-month high prices anticipating a potentially prolonged waiting period for approval of ETFs.

Market Psychology of Delayed Spot ETFs

The approval prospects of a Bitcoin exchange-traded fund (ETF) in November sparked a surge in market sentiment, propelling the price of Bitcoin to reach its highest point in 18 months, surpassing $38,000. Nevertheless, the initial euphoria appears to be subsiding as the BTC price experienced a 4% decline on November 16, attributed to limited liquidity at elevated levels.

Despite the market's anticipation for an ETF approval by November 17th, it appears unlikely due to the SEC's recent delay of Hashdex's application for a spot Bitcoin ETF conversion on November 15th. Although BlackRock is confident that the SEC lacks any valid reason to reject a cryptocurrency spot ETF, the SEC seems inclined to postpone the decision. On November 15th, the SEC also postponed its decision on Grayscale's Ether futures ETF.

Investors using Leverage got Liquidated

The decrease in major altcoin cryptocurrencies has resulted in a surge of liquidations in derivatives. In just the last 24 hours, more than $160 million worth of long positions have been liquidated in the crypto market, with $144.3 million being wiped out in the previous 12 hours. The prices are negatively impacted when long derivative positions are liquidated without sufficient buying pressure from trading volume.

Despite the overall decline in the crypto market today, certain alternative coins have performed well. In the short term, the cryptocurrency market will continue to face complex challenges, and its trajectory for the foreseeable future will undoubtedly be influenced by various economic and regulatory factors.