Bitcoin (BTC), the largest cryptocurrency, has seen a sharp decline of over 7% in the last 24 hours, falling below $42,000. This downturn has triggered significant pullbacks in many altcoins, with the Bitcoin market alone experiencing $338 million in liquidations.
The price drop is particularly notable following the U.S. Securities and Exchange Commission’s (SEC) approval of 11 spot Bitcoin ETFs. This has resulted in the largest cryptocurrency erasing the majority of its gains from the past month.
Data from the crypto analytics platform Coinglass reveals that over 101,000 crypto traders have been liquidated in the past day. The largest single liquidation occurred on the Bybit exchange, involving a $4.5 million BTC/USD position. Long positions accounted for the majority of the liquidations, totaling $271 million.
Bitcoin started the day at $46,300 on January 12th but began to fall as U.S. markets opened at 17:30, with volatility increasing and pushing Bitcoin’s price down to $41,900.
Despite the strong debut of spot Bitcoin ETFs, which saw over $4.5 billion in cumulative trading volume on January 11th and $3 billion on January 12th, market observers suggest that investors used the ETF approval news as an opportunity to sell, following a “buy the rumor, sell the news” strategy. Additionally, 11 spot Bitcoin ETFs contributed a total of $700 million to the crypto market after their first trading day. However, a $95 million outflow from Grayscale Investments’ spot Bitcoin ETF GBTC on January 12th exacerbated the situation. Bloomberg ETF analyst Eric Balchunas warned that the actual outflows could be much higher than reported.