On January 2nd, the cryptocurrency market experienced a significant drop in market value, falling over 6% to $1.63 trillion after an incredible surge earlier in the day. Top cryptocurrencies including Bitcoin, Ethereum, Solana, XRP, and Cardano saw losses exceeding 6% within an hour. Bitcoin’s price dropped by 7% to below $41,000, erasing its recent gains, while Ethereum fell by 8% to $2,113.
Over $600 million were liquidated in the crypto market in the last 24 hours, with $500 million liquidated in just two hours. According to Coinglass, January 3rd saw over $561 million in long positions liquidated. The largest single liquidation order was on the Huobi exchange, involving $14.26 million worth of BTC/USDT, with over 176,000 traders liquidated in the last day.
The CME Bitcoin futures open interest (OI) reached record levels amid expectations for a spot Bitcoin ETF approval and FOMO, following the recent BTC price rally. On January 3rd, CME’s Bitcoin futures OI peaked at $5.69 billion. The last time CME Bitcoin futures OI hit an all-time high was in October 2021 when BTC prices soared above $60,000, followed by a drop below $40,000 over the next two months.
There was also a noticeable decrease in total Bitcoin futures OI across all exchanges, with a roughly 9% drop from $20.23 billion to $18.17 billion. In the last four hours, BTC OI on CME fell by 6%, while on Binance, it dropped by 16%. Option data for BTC indicated an increase in selling pressure over the last 24 hours.
Matrixport sparked speculation about the Bitcoin price and the SEC’s decision on Bitcoin Spot ETFs, causing investor concern. According to Matrixport’s latest report, the SEC is expected to reject all Bitcoin spot ETFs in January, potentially leading to a sharp drop in BTC price from its current level to $36,000.
The U.S. Dollar Index (DXY) rose by 0.29% to above 102.50 today, continuing its rise from last week’s level of 100.99. Investors are also focusing on new economic data to be released this week, which could impact Bitcoin’s trajectory. U.S. Treasury yields increased on Wednesday, with the 10-year yield jumping to 3.973%. Positive market news and a potential ETF approval could pave the way for Bitcoin’s price to reach new heights.