New York, NY – Traders who were betting against a rise in the price of bitcoin (BTC) suffered significant losses, losing over $100 million in just 24 hours. This comes as expectations of a bitcoin exchange-traded fund (ETF) receiving approval in the United States reached the final stages.
BTC experienced a surge of up to 9% on Monday, briefly surpassing the $47,000 mark for the first time since March 2022. Among the exchanges, OKX traders incurred the biggest losses, amounting to $84 million, followed closely by Binance at $71 million.
The liquidation event prompted an increase of more than 8% in open interest, indicating that traders opened additional bets as they anticipate continued volatility in the market. Liquidation occurs when an exchange forcibly closes a trader’s leveraged position due to a partial or total loss of the initial margin, typically because the trader doesn’t have sufficient funds to keep the trade open.
The occurrence of large liquidations could potentially serve as an indication of a local top or bottom in a significant price movement, offering traders an opportunity to position themselves accordingly.
This data is particularly valuable for traders as it signals that leverage is being effectively washed out from popular futures products, which can act as a short-term predictor of a decline in price volatility.
In parallel with these market fluctuations, various potential issuers, including BlackRock and Grayscale, filed their offering fees with the U.S. Securities and Exchange Commission (SEC), marking a crucial step prior to the launch of the first-ever bitcoin ETF in the United States.
At present, there are thirteen proposed ETFs awaiting SEC approval, and competition among issuers is already heating up, with some waiving fees for the first six months or for assets under management (AUM) totaling $5 billion.
The final decision on these approvals or denials is expected to be announced on Wednesday. In the meantime, SEC officials have reportedly provided comments to potential issuers, addressing minor details in the amended S-1 forms, which are set to be filed on Tuesday.
In summary, traders who bet against an increase in bitcoin prices incurred losses surpassing $100 million as the possibility of a bitcoin ETF approval in the U.S. draws near. BTC’s recent surge, accompanied by a rise in open interest and liquidations, signals an anticipation of continued volatility in the market. The submission of offering fees by various issuers sets the stage for the launch of the first-ever bitcoin ETF in the United States, with final decisions from the SEC expected in the coming days.