NEW DELHI (CoinChapter.com) — The cryptocurrency market cap has declined 3.16% to $1.39 trillion in the last 24 hours.
A decrease in trading volumes accompanied the declining market cap, falling 1.5% to reach $70.4 billion over the past 24 hours. The lockstep indicates most investors have kept their distance from the ongoing market correction, a sign of impending bearish exhaustion.
Another reason why the crypto market is down today could be the $200 million in liquidations across various exchanges. Between Nov. 14 and Nov. 17, traders liquidated nearly $545 million worth of long positions, compared to just $225 million in shorts liquidation.
Liquidation of the long positions suggests a generally bearish outlook among market participants. The sell-off resulted in a sharp drop in the prices of top cryptocurrencies.
XRP ETF Fake News And US SEC Decisions
Another reason why the crypto market was down was the recent fake XRP ETF news that impacted investor trust and resulted in extreme price swings in XRP prices. Rumor spread that Blackrock, the world’s largest asset management firm, planned to launch an XRP ETF.
Investors leaped at the opportunity before multiple news sources recanted the statement, claiming that the Blackrock XRP ETF was just that, a rumor. However, the damage was done.
The news likely hurt the chances of a spot Bitcoin ETF approval since it supported the US Securities and Exchange Commission’s claims of manipulation in crypto markets. Interestingly, the SEC delayed its decision to approve two different ETFs.
The regulatory body announced it had deferred its decision to approve a filing from Hashdex to convert its existing BTC futures ETF into a spot fund. The SEC shared it had deferred its decision in 2024.
Additionally, the markets watchdog delayed action on Grayscale’s attempt to launch an Ethereum Futures-based ETF. The SEC claimed that it had deferred action to “consider the proposed rule change and the issues raised therein.”
Analysts had speculated that the XRP incident might have little impact on the SEC’s decision. Eric Balchunas, Bloomberg ETF analyst, stated that the XRP fake ETF incident did not set up any legal basis for the regulatory body to delay any applications already under consideration.
Seems Balchunas is not having a good day when it comes to predictions.
Impact on Major Cryptocurrencies: Bitcoin and Ethereum
Bitcoin, often considered a bellwether for the entire crypto market, forayed below $36,000 on Nov. 16 before bulls pushed back the token to close above it. Moreover, bulls faced intense bearish pressure on Nov. 17 when trying to restart the rally.
The SEC’s decision to delay its decision on the ETF applications likely resulted in the bearish sentiment. Furthermore, the BTC price’s 4.5% drop on Nov. 16 resulted in the liquidation of over $50 million in long positions.
In contrast, short positions saw only $9 million of liquidations. The resistance near $38,000 rejected Bitcoin price’s recent rally before bulls managed to hold above the 20-day EMA (red wave) dynamic support.
Ethereum Losing As Well
Ethereum (ETH), the second-largest cryptocurrency by market cap, closed trading on Nov. 16 with a loss of 4.8%. The tokens’ recovery on Nov. 17 fell victim to intense bearish pressure, which forced the ETH price to pare gains after spiking a meager 2% to a daily high near $1,990.
BTC and ETH price actions are significant since the two tokens account for more than two-thirds of the total crypto market cap. Hence, their price movements often influence the broader market trend.
The two tokens can often trigger a domino effect when they crash, leading to a decrease in investor confidence and a sell-off in other cryptocurrencies.
Furthermore, one more reason why the crypto market is down today could be the market’s recent bull run. After the BTC price nearly broke above $38,000 on Nov. 15, bears likely entered the market to book profits.
Traders often cash in their profits after a period of bullish trends, which forces the market to enter a correction phase.