Bitcoin Suddenly Nosedived as $400 Million Longs Liquidated in Two Hours

Bitcoin tumbled on Wednesday, January 3rd, erasing all gains made so far this year, bucking a long-running rally in traditional assets’ global malaise. The world's largest cryptocurrency fell as much as 9.2% to fall below $41,000 just after 7 a.m. in New York, a day after the digital asset topped $45,000 to hit a 21-month-high.

Only one reason was cited behind such an unlucky event, namely, that a financial services firm, Matrixport, wrote it expected the U.S. SEC to further postpone all ETF applications, originally due this month. The Agency representatives did not return any comments in that respect, so, since there weren’t any confirmations from multiple sources, that could well be an act of market manipulation.

Some analysts further commented on the event that if the likelihood of ETF adoption would become subdued, the market would find itself in a gridlock. As markets begin to weigh risk across asset classes, crypto traders may see an increase in volatility in the near term as they would be inclined to factor general risks into many asset classes.