The cryptocurrency market experienced a sharp sell-off shortly after the approval of Ethereum spot ETFs, catching many investors off guard.
Bitcoin's Sudden Crash
On May 24th, Bitcoin prices abruptly dropped, breaching key support levels at $70,000, $69,000, and $68,000 within hours. This downward spiral left recent buyers with significant losses—approximately **$2,173 per Bitcoin based on peak-to-trough calculations. At press time, Bitcoin stabilized around $67,230, marking a 3.66% decline** over 24 hours.
Other major cryptocurrencies followed suit:
- Ethereum: Fell 4% to $3,660 after briefly touching $3,900.
- Binance Coin (BNB) and Dogecoin: Both dropped 7%.
- Total crypto market capitalization: Shed 5.8%, settling at $2.4 trillion.
Liquidation Wave
Data from Coinglass reveals:
- 110,000+ accounts liquidated in 24 hours.
- Total liquidations: $399 million (¥28.9 billion), with long positions accounting for **$303 million**.
👉 Why did Bitcoin crash after Ethereum ETF approval?
Behind the Sell-Off: Profit-Taking and Shifting Sentiment
Analysts attribute the crash to:
- Post-ETF approval profit-taking: Investors exited positions after the Ethereum ETF news.
- Declining Bitcoin dominance: Attention shifted from Bitcoin to altcoins.
- Reduced demand signals: Slowing momentum and higher sell pressure from short-term holders.
"Market indicators suggest Bitcoin is consolidating, with miners and institutional players adjusting strategies," noted an OKX researcher.
Ethereum Spot ETFs: A Partial Victory
The SEC approved 19b-4 forms for Ethereum ETFs on May 23rd, but issuers still await S-1 registration clearance before trading begins. Key details:
- Potential issuers: BlackRock, Fidelity, Ark Invest, and VanEck.
- BlackRock’s ETF (ETHA): Already listed on DTCC.
Regulatory Caution
SEC Chair Gary Gensler emphasized:
- "Approval doesn’t endorse Ethereum—it remains a speculative, volatile asset."
- Stricter oversight expected for crypto ETFs.
👉 How will Ethereum ETFs impact Bitcoin?
Market Risks: Miner Sell-Offs and Reduced Liquidity
Post-Bitcoin halving (April 2024), miner rewards dropped 50%, squeezing revenues. Consequences:
- Public miners (e.g., Marathon Digital, Riot Platforms) hold thousands of Bitcoin—potential forced sales could pressure prices.
- Summer trading lull: Typically sees thinner liquidity, amplifying volatility.
FAQ Section
Q: Why did Bitcoin drop after Ethereum ETF approval?
A: Investors locked in profits post-news, shifting focus to altcoins and triggering a sell-off.
Q: When will Ethereum ETFs start trading?
A: Galaxy Digital predicts July–August 2024, pending S-1 approvals.
Q: Are miner sell-offs a concern?
A: Yes—large holdings by public miners could flood the market if sold under financial strain.