The Key Factors Behind Today’s Bitcoin Price Crash Revealed

ETF Inflows Plummet by 80.6% in 24 Hours, Sending BTC Price Below $66,699. However, the cryptocurrency quickly rebounded above $67,730, maintaining a market cap of $1.322 trillion. Bitcoin’s price experienced a significant decline, dropping as low as $66,952 during the early Asian trading hours on Friday, marking a 7% decrease. Surprisingly, this sharp downturn resulted in the loss of over $100 million in Bitcoin long positions as the cryptocurrency fell from its recent peak of $70K.
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The sudden plunge in Bitcoin’s price can be attributed to the release of the latest U.S. economic CPI data, which raised concerns about ongoing inflation and sparked speculation about the Federal Reserve’s monetary policy stance. Following rumors of no rate hike, many experts now believe that the Fed will maintain higher interest rates for an extended period, putting pressure on Bitcoin’s price.
What’s Causing BTC’s Decline?
The current market crash was exacerbated by a trend often observed when U.S. markets open, which typically coincides with Bitcoin’s decline. Additionally, Bitcoin’s drop mirrored losses in other assets such as gold and the Nasdaq index. Experts predict that BTC may continue to decline to the $60K price level, potentially before the Halving Rally.
While some analysts view Bitcoin’s retreat as a normal pause after a rapid upward trend, others believe it indicates market overheating and uncertainties surrounding the upcoming mining reward halving. However, investor Adam Cochran highlighted the potential profitability of short-term leveraged positions in response to the dip.
Greta Yuan, Head of Research at VDX, suggested that Bitcoin’s recent surge may have outpaced the market’s ability to accurately price it, necessitating a correction. Similarly, Adrian Wang, Founder and CEO of Metalpha, speculated that the correction could be attributed to market adjustments ahead of the halving event.
Despite the temporary setback, Singapore-based QCP Capital remains optimistic about Bitcoin’s long-term prospects. They believe that the dips will be short-lived, emphasizing the strong ongoing demand for BTC spot ETFs. Additionally, they note significant interest in BTC calls predicting prices between $100-150k by the end of the year. While volatility is expected to persist as the market awaits the release of Federal Open Market Committee minutes, QCP Capital remains bullish on Bitcoin’s trajectory.
Massive Liquidation Impacts Market Statistics
During the recent drop in Bitcoin’s price, the crypto community witnessed a significant liquidation event, resulting in a staggering $680 million in assets being wiped out. Long orders were hit the hardest, accounting for $545 million of the liquidated assets, while shorts contributed $134.6 million. This widespread liquidation affected over 193,270 individuals, highlighting the volatility of the crypto market. Notably, a significant $13.3 million liquidation order was placed on the OKX – BTC – USDT – SWAP platform.
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