Crypto Market Sees $155 Million in Shorts Liquidated Amid Bitcoin Price Surge and Anticipation of U.S. Bitcoin ETF Approval

Crypto Market Sees $155 Million in Shorts Liquidated Amid Bitcoin Price Surge and Anticipation of U.S. Bitcoin ETF Approval

Crypto News – In the last 24 hours, the cryptocurrency market experienced a significant shift, resulting in the liquidation of approximately $155 million in short positions. This dramatic change was spurred by a sharp increase in prices during U.S. trading hours.

Bitcoin (BTC) witnessed a substantial setback for those betting against its rise, with losses exceeding $100 million in the same time frame. This occurred as the market brimmed with anticipation for the potential approval of a spot Bitcoin exchange-traded fund (ETF) in the United States, nearing a pivotal moment.

On Monday, BTC’s value soared up to 9%, surpassing the $47,000 mark for the first time since March 2022, although it later retracted some of these gains. Among cryptocurrency exchanges, OKX traders were the hardest hit, incurring losses of around $84 million, closely followed by Binance with $71 million in losses.

The concept of open interest, which refers to the volume of unsettled futures contracts, saw more than an 8% increase in the past day. This surge indicates that traders are wagering more aggressively post-liquidation, likely anticipating ongoing market volatility.

Liquidation in this context means the compulsory closure of a trader’s leveraged position by an exchange, usually due to the trader’s failure to maintain the required margin, resulting in a complete or partial forfeiture of their initial margin.

Significant liquidations often signal a critical peak or trough in a market’s price trajectory, providing savvy traders with cues to adjust their positions accordingly.

This data is invaluable for traders, serving as an indicator of leverage being purged from widely-used futures products. It often acts as a precursor to a reduction in price volatility in the short term.

Monday’s market developments coincided with actions from prospective issuers like BlackRock (BLK) and Grayscale. These firms submitted their offering fees to the U.S. Securities and Exchange Commission (SEC), marking a crucial step towards launching the first-ever Bitcoin ETF in the U.S.

Thirteen proposed ETFs are currently under the SEC’s review, with a growing competition for clientele evident. Some issuers have even opted to waive fees for the initial six months or until they manage $5 billion in assets.

The SEC is expected to deliver its final verdict on these applications by Wednesday. In the meantime, SEC officials reportedly shared feedback with a group of potential issuers regarding minor amendments in their S-1 form submissions, which are anticipated to be filed by Tuesday, according to a source familiar with the situation who spoke to CoinDesk.