Bitcoin, Ethereum, Dogecoin Drop After Fake News Of Spot ETF Approval — $200M Worth of Liquidations Follow: Analyst Warns Of Fakeout Rallies, Looming Corrections For King Crypto

During Tuesday’s trading session, major cryptocurrencies experienced significant fluctuations due to a false social media post by the Securities and Exchange Commission (SEC) regarding the approval of spot Bitcoin exchange-traded funds (ETF). 

What Happened: Bitcoin reached a new 19-month high of $47,900 after the official SEC account’s tweet about the Bitcoin ETF approval. However, the excitement was short-lived as Bitcoin swiftly dropped almost 6.05% to a low of $45,000. It was later revealed that the SEC’s account had been compromised, and SEC Chair Gary Gensler denied the news.

In the past 24 hours, wild price fluctuations led to the liquidation of over $214 million in derivatives trading positions on crypto exchanges, according to CoinGlass data.

Liquidations occur when an exchange forcibly closes a trader’s open position using borrowed funds due to a loss of margin.

Top Gainer (24 Hour)

The global cryptocurrency market cap now stands at $1.72 trillion, showing a spike of 5.29% in the past 24 hours.

The S&P 500 recovered from an earlier decline on Tuesday, primarily driven by gains in the tech sector, but still closed the day with slight losses. Additionally, the Nasdaq Composite rebounded from a nearly 0.9% slide and managed to secure a modest gain of 0.09%, ending the day at 14,857.71.

Looking ahead, investors will focus on two crucial inflation reports to gain insights into the potential future rate cuts by the Federal Reserve. The December consumer price index is scheduled for release on Thursday, followed by the producer price index on Friday.

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Analyst Notes: Cryptocurrency analyst Michael Van de Poppe said that there is false information circulating regarding the approval of the Bitcoin ETF for the third time, supposedly stemming from a hack on the SEC account. 

"Theory remains, upside relatively skewed, might reach $51K and then the rotation towards $ETH happens. Atleast $48K touched and Ethereum is taking of."

According to pseudonymous trader Capo, the potential approval of a spot Bitcoin ETF this week is expected to trigger a brief surge in the value of Bitcoin and other digital assets.

"Whales are showing strong interest in the $48,000-$50,000 level. News can trigger volatility and leave large wicks. So a pump to that level and a big rejection afterward is a likely scenario."

On-chain analyst Ali Martinez has noted that the TD Sequential is flashing a sell signal on the BTC weekly chart. Although not explicitly connecting the upcoming Bitcoin ETF decision to a ‘sell the news’ event. TD Sequential is a technical analysis indicator used to identify potential price exhaustion and trend reversals.

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