On Wednesday morning Eastern Time, Bitcoin (BTC) experienced a sudden crash in a matter of minutes, as the price of Bitcoin dropped from around $45,132 to as low as $40,750, erasing gains seen in the past week.

According to data from CoinMarketCap, Bitcoin's price has fallen by almost 9.5% in an abrupt flash crash. The crash resulted in the liquidation of over $595 million in crypto long positions in the past 24 hours, including $137 million in Bitcoin longs in the past hour alone, as per data from CoinGlass.

Altcoins also suffered sudden losses alongside Bitcoin. Ethereum (ETH) plunged by 10.9%, while Solana (SOL) crashed by over 20% during the flash crash. However, Bitcoin and altcoins have subsequently recovered from the lows.

In a research note for clients released on January 3 titled “Why the SEC will REJECT Bitcoin Spot ETFs again,” Matrixport’s Head of Research Markus Thielen argued that the SEC would likely reject all applications for a spot Bitcoin ETF in January, contradicting its earlier stance on January 2 that the approval for spot Bitcoin ETFs “could be announced today or tomorrow.”

The price slump comes as the crypto market awaits the SEC's decision on whether to approve multiple spot Bitcoin ETF applications in the coming days. Some analysts speculate that the decision could trigger a "sell-the-news" event. The reasons for the sudden sell-off are still unclear, but it could be related to profit-taking ahead of the SEC's decision, uncertainty in the broader financial markets, or a combination of factors.

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