Bitcoin Bears Lose Over $100 Million Amidst Speculation of U.S. Spot ETF Approval

• Traders betting against BTC faced losses exceeding $100 million in 24 hours amid rising expectations for a spot BTC ETF approval in the U.S.
• BTC surged by 9%, hitting over $47,000, the highest since March 2022, prompting liquidations, primarily affecting OKX and Binance traders.

The anticipation of a spot Bitcoin ETF approval in the U.S. triggered a surge in Bitcoin’s value, reaching over $47,000, a level unseen since March 2022. This climb resulted in substantial losses, surpassing $100 million, for traders who were betting against Bitcoin’s upward momentum. OKX and Binance traders faced the most significant losses, totalling $84 million and $71 million, respectively.

The surge prompted an increase in open interest by more than 8% in futures contracts, suggesting traders anticipated continued volatility post-liquidation. Liquidation occurs when an exchange forcibly closes leveraged positions due to insufficient margin, often signalling potential turning points in price movements.

These liquidations, while causing significant losses for some traders, serve as indicators within the market. They can signal local peaks or troughs, allowing traders to recalibrate their positions accordingly.

Understanding Liquidation and Market Signals

Such data becomes invaluable to traders, indicating the effective removal of leverage from popular futures products, pointing toward a short-term decrease in price volatility. The market frenzy unfolded amidst filings by various potential issuers, including BlackRock and Grayscale, submitting offering fees to the SEC, marking a crucial step before the potential launch of the first-ever Bitcoin ETF in the U.S.

Thirteen ETF proposals await SEC approval, intensifying competition among issuers. Some have offered fee waivers for initial months or based on assets under management (AUM), heating up the race for customers.

The final verdict on approvals or rejections is slated for Wednesday, with SEC officials reportedly engaging with prospective issuers to address minor filing details. The market eagerly awaits these decisions, poised on the brink of potentially historic developments in the cryptocurrency landscape.