Traders who were betting against a surge in Bitcoin (BTC) prices faced significant losses, exceeding $100 million in the past 24 hours. This downturn occurred as expectations heightened regarding the potential approval of a spot Bitcoin exchange-traded fund (ETF) in the United States.
Bitcoin experienced a remarkable surge, reaching as high as 9% on Monday, briefly surpassing $47,000 for the first time since March 2022. Despite a subsequent pullback, the rally led to substantial losses for traders, particularly on the crypto exchange OKX, where losses totaled $84 million. Binance closely followed, with traders losing $71 million.
Over the past 24 hours, open interest, representing the number of unsettled futures contracts, increased by over 8%. This surge indicates that traders initiated additional bets after the liquidation event, suggesting an anticipation of continued market volatility.
Liquidation occurs when an exchange forcibly closes a leveraged position due to the trader’s partial or total loss of initial margin. Large liquidations can serve as indicators of potential local tops or bottoms in price movements, providing traders with insights for strategic positioning.
Monday’s market fluctuations coincided with major potential ETF issuers, including BlackRock and Grayscale, submitting their offering fees to the U.S. Securities and Exchange Commission (SEC). This step marks a crucial stage before the potential approval of the first-ever Bitcoin ETF in the U.S.
Thirteen proposed ETFs are currently awaiting SEC approval, intensifying the competition among issuers. Some are already employing competitive strategies, such as offering fee waivers for the initial six months or up to $5 billion in assets under management (AUM).
The final decision on these ETF approvals or denials is expected on Wednesday. Simultaneously, SEC officials have reportedly provided comments to prospective issuers, addressing minor details in the amended S-1 forms. These filings are anticipated on Tuesday, according to a source familiar with the matter.
