Following 14 days of an uptrend, the cryptocurrency market opened the new week with volatility as major tokens, including Bitcoin (BTC), Ether (ETH), and Solana (SOL) all began the trading day in the red zone.
The world’s leading cryptocurrency, dropped 5% over 24 hours, coming down to $41,300, before recovering to the $42,000 level
Meanwhile, Ether (ETH), hit a low of $2,170 before clawing back up to $2,239. Solana (SOL), which has been the best-performing cryptocurrency this year, went down to $66 before getting back to $70.
Over $300 Million in Long Positions Liquidated From the Market As BTC, ETH, and SOL Drop
Crypto derivatives data analytics firm CoinGlass reported that over $335 million in crypto had been liquidated from the market over the last 12 hours. This included $300 million in long positions.
From this, over $89 million was liquidated in BTC, $74.89 million in ETH, $18.28 million in SOL, and the remaining $58.43 million in other tokens.
Related Reading: Cardano (ADA) Jumps To 18-Month High As Analysts Expect Bitcoin To Pullback To $40K
Crypto Analysts Except Bitcoin to Revisit CME Gap Formed at $39,700
In an X post last week, on-chain analyst Willy Woo predicted that the crypto market could see a price correction that would take Bitcoin down to $39,000.
His projection was based on the price gap formed by the BTC futures market on the Chicago Mercantile Exchange (CME), which currently stands at $39,700.
The gap is formed due to the operations of the CME futures market being aligned with US trading hours. Unlike cryptocurrency exchanges that conduct trades 24/7 throughout the year, the CME is open Monday through Friday from 9:30 AM to 4:00 PM Eastern Time (ET), excluding holidays.
Thereby, a difference is formed between the closing and opening prices of BTC on the CME futures market, which is dependent on the token’s price action for the day. Historically, such gaps are usually filled, meaning Bitcoin price often returns to this level during a correction.
The latest gap was formed following BTC’s rally to $40,000 last week after the market was closed for trading.
Willy Woo highlighted that 28 out of the 30 gaps (98%) formed this year have been filled on CME daily candles.
But sometimes these gaps are left unfilled.
Bitcoin is yet to revisit the $20,000 CME gap that was created following the market rally during the weekend Silicon Valley Bank collapsed in March.
Bitcoin Spot ETF Approval in 2024 Expected to Boost the Crypto Market
However, there is no reason to worry about a downtrend as the market is optimistic about the “imminent” approval of a spot exchange-traded Bitcoin ETF in the United States.
In an X post from December 4, Willy Woo gave his thoughts on the effect spot Bitcoin ETF will have on the crypto market. He gave the example of the SPDR Gold Trust ETF launch in November 2004, after which gold went on an 8-year rally “with no single down year” between 2005 and 2012.
Woo expects the same to happen with Bitcoin once the Securities and Exchange Commission (SEC) gives the green light to list Bitcoin-focused exchange-traded products (ETPs) in the US spot markets. As of press time, 13 firms including BlackRock, Grayscale, Fidelity, and ARK Investments have pending applications with the securities regulator.
At the time of writing, Bitcoin (BTC) is trading at $42,244 – down 3.7% in the last 24 hours. While Ether (ETH) is trading at $2,247 – down 4.3% in the same period.
Related Reading: Bitcoin Cedes Rally To “Bull Trap” As Ether and Solana Hit 19-Month Highs
