The crypto market faces a potential storm in January, with analyst Markus Thielen of Matrixport predicting a wave of rejections for all currently proposed Bitcoin spot ETFs by the Securities and Exchange Commission (SEC).
This unexpected news has triggered a sell-off across the market, sending major cryptocurrencies, including Bitcoin (BTC), XRP, Solana (SOL), and Cardano (ADA), tumbling.
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Thielen’s analysis cites persistent shortcomings in the ETF applications as the likely cause for rejection. He believes these proposals still lack the necessary elements to address the SEC’s concerns about market manipulation and investor protection. While recent dialogue between applicants and the SEC offered glimmers of hope, Thielen remains firm in his assessment.
Pro crypto attorney John Deaton recently expressed his belief in an SEC rug pull ahead of the spot ETF approvals, and Thielen’s analysis adds credence to this stance.
The Fallout from the Report
Adding to the bearish sentiment is Thielen’s projection of the potential fallout from the SEC’s decision. Should all applications be rejected, he anticipates extensive liquidations within the perpetual long Bitcoin futures market, potentially leading to a 20% drop in Bitcoin’s price, pushing it back towards the $36,000 – $38,000 range.
Currently, the market reflects the analyst’s concerns. BTC dropped from over $45,000 to a 24-hour low of $40,813.53, before recovering slightly. The biggest cryptocurrency in the market is currently trading at $42,263.53, showing a 6.69% price drop over 24 hours.
Other major cryptocurrencies have not fared better. XRP is trading at $0.5644 with a 24-hour decrease of 10.22%. It fell from over $0.63 to a 24-hour low of $0.5393.
Solana (SOL) has also dropped below $100, its major resistance level, and is trading at $96.95, down 11.68% in the last day.
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Cardano (ADA) also got hit massively by the rumor. ADA is currently trading at $0.5485 with a 10.61% price decline and other popular tokens like Ethereum (ETH), Binance Coin (BNB), Litecoin (LTC), and Dogecoin (DOGE), are also feeling the heat of the destructive waves.
At $1.61 trillion, the market cap of the entire crypto market is down 7.50% with a further decline expected. The SEC might be looking to foil the hopes of crypto investors in the 2024 bull run, just like it hampered XRP’s progress with the lawsuit over the last few years.
However, amid the chaos, Thielen offers a light at the end of the tunnel. He maintains a bullish long-term outlook for Bitcoin in 2024.
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