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October 18, 2023

Bitcoin's Price Rollercoaster: A False Alarm Sparks $100 Million in Liquidations

Bitcoin embarked on a heart-pounding journey, rocketing from $27,900 to an exhilarating $30,000 in the blink of an eye

Bitcoin, the ever-volatile digital currency, experienced a rollercoaster ride today. It swiftly surged from $27,900 to $30,000, all triggered by a false announcement claiming that BlackRock had given the green light to a Bitcoin spot ETF. In a mere hour, this misleading piece of information led to a staggering $100 million in trading liquidations.

The catalyst for this whirlwind was an erroneous update shared on the social platform X, creating a whirlwind of trading activities. Within 30 minutes of the initial posting, the false announcement was removed, but the damage had been done. Traders had already taken action based on the inaccurate information.

CoinGlass, a data analytics platform, reveals the immediate consequences. The abrupt Bitcoin price surge to $30,000 resulted in the liquidation of short positions totaling $81 million. However, as Bitcoin corrected itself and plummeted to $28,000, long positions worth $31 million were also liquidated.

For those unacquainted with trading terminology, liquidation signifies the compelled closure of a trader's leveraged position when their initial margin is exhausted partially or entirely.

BlackRock, a financial giant, swiftly clarified the situation. A spokesperson from the company stated, "The iShares Bitcoin ETF application is still under review by the SEC."

Larry Fink, the Chairman and CEO of BlackRock, offered a different perspective on the Bitcoin price movement in a recent interview with Fox Business. He remarked, "This rally today is way beyond the [bitcoin spot ETF] rumor. The rally today is about a flight to quality."

As of now, the U.S. Securities and Exchange Commission (SEC) has not given the green light to any spot Bitcoin ETFs. A visit to the regulatory body's website confirms this fact, effectively debunking the phony announcement related to BlackRock's Bitcoin ETF.

An intriguing development is the SEC's recent decision not to challenge its loss in a lawsuit against Grayscale. This move has sparked speculations that Grayscale's Bitcoin Trust might eventually transition into a spot ETF.

The frenetic Bitcoin price fluctuations triggered substantial debate among market analysts. After the price surge and subsequent dip, experts expressed their skepticism, contributing to the currency's reversion to a lower value.

In this whirlwind of misinformation, Bitcoin enthusiasts and investors were reminded of the need for vigilance and fact-checking in an already tumultuous crypto landscape.

Neil Hodgson Coyle
Neil Hodgson-Coyle
Editorial chief at TechNews180
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