Matrixport proclamation results in a 10% plummet of Bitcoin within a three-hour span.
Bitcoin experienced a significant drop of around 10% earlier today, but a closer look at market data reveals the reasons behind this unexpected shift. The current trading price of Bitcoin (BTC) stands at slightly above $42,300, following a decrease of approximately 7.4% within the past 24 hours. Earlier in the day, the price plummeted from around $45,500 to $40,800 in less than three hours, resulting in a loss of over 10%.
Data from CoinGlass indicates that Bitcoin has witnessed liquidations totaling $2.7 million within an hour, $116 million within four hours, and $129 million within 24 hours. Crypto investor Scott Melker suggests that this decline in price is a result of a “leverage flush,” which has eliminated overleveraged positions.
When a market possesses a substantial number of highly leveraged positions, even a minor downturn can lead to the liquidation and forced sale of multiple assets. This forced sale subsequently triggers further price declines, causing more liquidations in a cycle that continues until a “leverage flush” materializes.
Melker also highlighted a report published by crypto financial services firm Matrixport as a catalyst for the flush. The report predicts that the United States Securities and Exchange Commission (SEC) will reject the applications for Bitcoin ETFs, contradicting the company’s previous suggestion. However, Melker believes that this report holds little value.
Some market participants expressed their disappointment with Matrixport’s change in stance. Crypto influencer Stack Hodler voiced frustrations on X, suggesting that this was a successful attempt at manipulating the market.
