Virtune’s market comment

Virtune’s market comment Last night, the steady period in the market shifted rapidly, with Bitcoin plunging more than 8% in less than an hour, dropping to $25,409. Since then, it has shown some recovery, and currently stands at $26,513.

What caused this drop?

SpaceX’s Bitcoin sale

SpaceX reportedly sold $373 million worth of Bitcoin. Between 2011 and 2021, SpaceX maintained $373 million worth of Bitcoin on their balance sheet, but recent reports indicate they have sold off their holdings.

Asset write-downs are a common practice among businesses, as they reduce the value of holdings for tax purposes. As of Friday morning, Asian time, SpaceX neither confirmed nor reported any sales of its Bitcoin holdings. Consequently, the exact amount of Bitcoin or cryptocurrency that Elon Musk’s company retains remains undisclosed.

Leveraged positions

The recent sharp drop in the market likely was not due to a single event, but rather a combination of factors, including the market’s setup and a massive liquidation of “long” positions. The market has been relatively quiet and stable, conditions that can prime it for sudden price moves.

There is notable anticipation surrounding a decision that Grayscale may soon announce, leading to significant activity in Bitcoin futures contracts. Currently, more traders are betting on price decreases (going “short”) than on increases (going “long”). When Bitcoin’s price fell below $28,500, numerous traders with “long” positions were forced to sell, driving down prices further.

Positive news

Bitcoin has demonstrated resilience, finding steady support around the $25,000 level, and has recovered somewhat since the drop.

Ethereum Futures ETF

Bloomberg has reported that the U.S. Securities and Exchange Commission (SEC) is likely to approve an Ethereum futures ETF in October, which would be a significant milestone for the crypto industry. Several industry players—including Volatility Shares, Bitwise, Roundhill, and ProShares—currently have pending applications for this ETF.

The cryptocurrency market is accustomed to such rapid price fluctuations, occurring in both upward and downward directions. However, amidst this volatility, there are robust and promising sentiments ahead driven by the ongoing global adoption of cryptocurrencies, the submission of Spot Bitcoin ETF filings in the US, upcoming Bitcoin halvings, and numerous other factors.