Bitcoin, the reigning champion of cryptocurrencies, has shaken the entire crypto realm by witnessing a significant price plummet of 5.60%, landing at $66,000. This sudden dive has left investors and enthusiasts alike scratching their heads, seeking answers behind this startling decline.
The ripple effect of Bitcoin’s decline was felt across the crypto sphere, with other major cryptocurrencies like Ethereum also witnessing a downturn, trading at lows of $3,320.
What Caused the Bitcoin Crash?
Liquidations and Turmoil
The primary driver behind this swift decline appears to be widespread liquidations, notably on major exchanges like Binance. A staggering 121,325 traders faced liquidation within the last 24 hours, collectively losing a whopping $395.10 million.
Shift in Sentiment
Adding to the uncertainty, recent reports from QCP Capital have revealed a surge in perpetual funding rates on these platforms, soaring to a whopping 77% before abruptly falling. This underscores the rapid shift in market sentiment.
Also Read: Bitcoin Halving to Trigger a Bull Run? Key Targets to Watch for BTC Price
Economic Uncertainty
April 1st marked a substantial net outflow of $85.84 million from Bitcoin spot ETFs, signaling a sentiment shift in the market. Moreover, broader global economic instability, exacerbated by higher-than-anticipated inflation rates in the US, further doused hopes for looser monetary policies and interest rate cuts.
Halving Impact & Volatility
Bitcoin’s historic volatility and the looming specter of the April halving have also contributed significantly to today’s sharp decline. Merely weeks ago, on March 14, Bitcoin soared to an all-time high of $74,120, only to nosedive to $66,885, marking a staggering 9% drop in a single day.
According to insights from Matt Simpson, an analyst at City Index, Bitcoin tends to ride a rollercoaster of peaks and troughs after hitting record highs. The impending Bitcoin halving, scheduled for April, is anticipated to drastically reduce the creation of new Bitcoins to just 450 per day, further stoking market uncertainty.
Read More: Bitcoin Halving In 19 Days: Here’s the Best Investment Strategy for the Next 6-12 Months
Bitcoin Price Analysis
As it stands, Bitcoin’s price stands at $66,607, reflecting a 4.3% drop over the past 24 hours. Despite this downturn, trading volume has seen a remarkable surge, skyrocketing by a staggering 66.8% to reach $40.5 billion, showcasing the true potential of crypto.
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