The Bitcoin, ETH, BNB, XRP, and Doge Price Crash: Unveiling the 4 Main Factors Behind It
Bitcoin, the dominant cryptocurrency in terms of market capitalization, experienced a sudden and significant drop to $66,690 in a single day, causing its market cap to plummet to $1.30 trillion. Concurrently, the global cryptocurrency market cap witnessed a sharp decline of over 7% to $2.55 trillion. Ethereum (ETH) was particularly affected, losing over 9% of its value, along with other popular cryptocurrencies such as BNB, XRP, and Litecoin (LTC). Even meme coins like Dogecoin (DOGE) and Shiba Inu (SHIB) saw a substantial drop of over 14%.
The drop in Bitcoin’s price can be attributed to the uncertainty surrounding the US Federal Reserve’s rate cuts. US Federal Reserve Chair Jerome Powell’s recent testimony to Congress revealed that the possibility of rate cuts depends heavily on new economic data, including inflation and job figures. Despite earlier expectations, indications of higher inflation and a recovering US economy suggest that rate cuts may be delayed until the end of the year. This uncertainty has led to market volatility, with the US dollar index rising and global stock markets faltering.
Furthermore, the expiration of Bitcoin and Ethereum options on Friday contributed to the market’s fluctuations. Over $3 billion worth of options expired on March 15th, with 30,568 BTC options and 332,094 ETH options set to expire. Although BTC briefly dropped to $66,770, it remained above the maximum pain threshold, indicating potential buying opportunities during the dip. Similarly, ETH maintained a bullish stance despite the maximum pain point resting at $3,550.
In addition, the US Spot Bitcoin ETF sector experienced a significant decline in inflows, dropping by 80.6% to $133 million on Thursday. This decline aligns with a downturn in Wall Street sentiment and could be influenced by factors such as the pre-halving market peak and declines in gold and equity markets. Investors withdrew holdings from Grayscale’s GBTC, resulting in an outflow of $257.1 million on Thursday.
The recent liquidity flush in the crypto market led to a loss of over $821 million in market value. However, this also presented an opportunity for some traders, as over 247.8K positions were liquidated within 24 hours. Bitcoin and Ethereum saw significant liquidations, amounting to over $279 million and $137 million, respectively. While the overall crypto market suffered losses, some analysts view this as a chance to buy at a lower price.