Crypto News

Why is the crypto market down today?

Price action in the crypto market remains trending lower as investors and money managers begin to digest the potential fallout if the SEC chooses to delay current applications of spot Bitcoin ETFs. The slowdown comes as all eyes are on what the SEC decides for spot Bitcoin (BTC) ETF applications on November 17.

Cryptocurrency market performance, 1-day chart: Coin360

ETH and BTC spot ETF euphoria may fade

Market sentiment has soared due to optimism over the potential approval of a spot Bitcoin exchange-traded fund (ETF) taking place in November. The euphoria helped push Bitcoin’s price to an 18-month high above $38,000. However, the euphoria appears to be fading, with the price of BTC falling almost 2% for the week of November 17.

Historical Bitcoin returns by month. Source: Newhedge

While the market was eagerly awaiting positive news on spot ETFs this week, it seems unlikely, with the SEC having already delayed Hashdex’s request for a spot Bitcoin ETF conversion on November 15. And while BlackRock doesn’t believe the SEC has a legitimate reason not to approve a cryptocurrency spot ETF, the SEC appears willing to delay.

On November 15, the SEC delayed its decision regarding Grayscale’s Ether futures ETF. Some analysts believe that the Form 19b-4 submitted by Grayscale is a potential “Trojan horse” for the agency.

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Selling XRP and altcoins after fake ETF deposit

The crypto market’s decline coincides with the U.S. Securities and Exchange Commission (SEC) expected to review a handful of pending applications for spot Bitcoin ETFs.

Notably, the securities regulator must rule on the Hashdex and Global X ETF applications by November 17. The SEC is also expected to rule on Franklin Templeton’s Bitcoin ETF application by November 21. Failure to do so would push the deadline back to 2024.

The market is expecting another delay, according to James Edwards, a crypto analyst at Australian fintech company Finder.

Edwards mentioned a fake BlackRock XRP trust that caused extreme price swings on XRP markets and led to a request for an investigation being sent to the United States Department of Justice. Edwards believes this event would hurt the chances of launching a spot Bitcoin ETF in the United States, as it supports the SEC’s claims regarding price manipulation in the crypto industry.

For now, traders are likely profiting at the current multi-month high prices in the crypto market due to this potentially long wait.

Futures liquidations send crypto market lower

The decline of major cryptocurrencies has led to a wave of liquidations in the derivatives market.

In the last 24 hours alone, over $161.4 million in long positions were liquidated in the crypto market, with $54 million wiped out in the previous 4 hours. Crypto market prices are negatively affected when long derivatives positions are liquidated without buying pressure from trading volume.

Crypto market liquidations. Source: Coinglass

Related: Solana (SOL), Avalanche (AVAX), and dYdX generate double-digit gains as Bitcoin reclaims $37,000

In the near term, the cryptocurrency market will continue to face multifaceted challenges, and the ebb and flow of various economic and regulatory factors will undoubtedly shape its trajectory for the foreseeable future.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making a decision.