Crypto Market Crash Today: Is This a Buying Opportunity?

Bitcoin, the leading digital currency, experienced a sudden drop, falling to $66,690 within a single day. This decline dragged its market value down to $1.30 trillion, while its trading volume surged to $78.6 billion, making it a rough ride for investors.

The global cryptocurrency market cap mirrored Bitcoin’s fall, dropping over 7% to $2.55 trillion. Ethereum (ETH) took the biggest hit, losing over 9% of its value, along with other major players like BNB, XRP, and Litecoin (LTC). Even beloved meme coins, Dogecoin (DOGE) and Shiba Inu (SHIB), suffered a significant drop of more than 14%.

What next?

Federal Reserve’s Influence

Today’s downturn is attributed to the possibility of a Fed rate cut. Federal Reserve Chair Jerome Powell’s recent testimony to Congress hinted at potential rate cuts, depending on new economic data such as inflation and job figures.

Contrary to previous expectations, signs of increasing inflation and a recovering US economy suggest a delay in rate cuts until the year-end. This uncertainty has led to market volatility, with the US dollar index rising and global stock markets faltering.

Additionally, data from the CME FedWatch now suggests a 54% probability of a 25-bps rate cut in June and 47% odds of a similar cut in July.

Also Read: Kiyosaki Prefers Bitcoin to Gold and Silver for Its Unchanging Supply

Options Expiry: A Boost for Crypto

The expiration of options contracts on Friday injected life into the crypto market, with over $3 billion worth of Bitcoin and Ethereum options expiring on March 15th. Despite BTC briefly dropping to $66,770, it managed to stay above the maximum pain threshold, offering potential buying opportunities amid the downturn.

Similarly, the expiration of ETH options, valued at $1.24 billion, saw traders maintaining a bullish stance, with ETH bouncing back from a 24-hour low to trade at $3,748.

Wall Street’s Response

The US Spot Bitcoin ETF sector experienced a significant decline in inflows, dropping by 80.6% to $133 million on Thursday. This drop, the largest observed in eight trading days, coincided with a downturn in Wall Street sentiment following recent economic data releases.

Investors responded by withdrawing holdings from Grayscale’s GBTC, possibly influenced by market signals like the pre-halving market peak and declines in gold and equity markets. GBTC recorded an outflow of $257.1 million on Thursday, underscoring the prevailing market sentiment.

Read More: Bitcoin ETF Market Heats Up as Blackrock IBIT Surpasses 200,000 BTC

It’s Been a Rocky Journey

A recent liquidity flush in the crypto market resulted in a substantial loss of over $821 million in market value. Despite this, more than 247.8K traders liquidated their positions within 24 hours. Notably, the largest single liquidation order involved a BTC-USDT swap valued at $13.30 million on the OKX exchange.

While Bitcoin and Ethereum bore the brunt of these liquidations, totaling over $279 million and $137 million respectively, some analysts view this as an opportunity to buy in at a lower price, anticipating a potential market rebound.