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The market generally believes that a bearish report is the reason for the significant sell-off of Bitcoin today.

As concerns about the imminent approval of a Bitcoin spot ETF began to emerge, Bitcoin plummeted on Wednesday, with a drop exceeding 9% at one point, erasing all gains since January 1st, leading to the liquidation of $500 million in positions on derivative exchanges.

Data from Coinglass shows that as of Wednesday, positions in all cryptocurrencies on major exchanges have been liquidated for over $500 million. This is the largest liquidation amount since December 11th last year.

Options analysis website Greeks.Live stated, "The likelihood of Bitcoin spot ETF approval is becoming increasingly slim, and the market is at an impasse. The weakness of cryptocurrency stocks and the sell-off of several cryptocurrency-related US stocks have also reinforced the market's skeptical attitude."

Last week, sources said that the Bitcoin spot ETF could be approved as soon as Tuesday or Wednesday.

Bitcoin soared due to the "spot ETF fever" in the past few months and started a rebound from around $25,000 in mid-September last year.

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It is claimed that a bearish report from the cryptocurrency financial services company Matrixport is the reason for the significant sell-off of Bitcoin today. The company's report stated:

"We believe that none of the applications have met the key requirements of the U.S. Securities and Exchange Commission (SEC). This requirement may be met in the second quarter of 2024, but we expect the SEC to reject all proposals in January."

Matrixport continued, "The approval of a Bitcoin spot ETF would definitely boost the overall cryptocurrency market, but based on Gensler's comments in December 2023, he still believes that the industry needs stricter compliance. From a political perspective, the SEC has even less reason to approve the Bitcoin spot ETF."

Matrixport estimates that of the $14 billion in fiat and leveraged funds invested in cryptocurrencies since September last year, $10 billion may be related to ETF expectations.If this market rumor is confirmed by the SEC, Bitcoin is likely to fall further. But logically speaking, how could just an analysis report directly lead to a significant drop in Bitcoin?

Forexlive analyst Adam Button believes that one possibility is that this analysis might be taken by "interested parties" as if it were a genuine report. Moreover, this analysis actually has some basis. Button said:

"Bitcoin spot ETF is a 'sell the fact' trade, but as we continue to wait for approval, there is an opportunity to 'buy the rumor' in this downturn. However, any market that fluctuates by 6% due to such a report is only one step away from a 20% decline."