In the blink of an eye, Bitcoin (BTC) saw a tumultuous 24-hour period, marked by an 80.6% drop in Exchange-Traded Fund (ETF) inflows. The cryptocurrency’s price took a sudden nosedive below $66,699, causing alarm among investors. However, in a surprising turn of events, Bitcoin swiftly bounced back above $67,730, maintaining its strong market position with a cap of $1.322 trillion.
Bitcoin’s roller-coaster journey began with a sharp plunge, hitting a low of $66,952 during early Friday trading in Asia, representing a significant 7% decline. This sudden drop wiped out over $100 million in Bitcoin long positions, erasing gains made from its recent peak of $70K.
The catalyst for this wild ride was the release of the latest U.S. economic Consumer Price Index (CPI) data. These numbers raised worries about inflation and sparked speculation about the Federal Reserve’s monetary policies. Amid rumors of a potential rate hike, experts now anticipate the Fed maintaining higher interest rates for an extended period, exerting downward pressure on Bitcoin’s price.
Bitcoin’s downward spiral mirrored losses in other assets like gold and the Nasdaq index. This trend was exacerbated by a phenomenon often observed when U.S. markets open, coinciding with Bitcoin’s decline. Analysts predict BTC could dip to the $60k mark, setting the stage for what some call the Halving Rally.
While some analysts see Bitcoin’s retreat as a natural correction after a rapid rise, others raise concerns about market overheating and uncertainties surrounding the upcoming mining reward halving. Investor Adam Cochran sees opportunity amidst the chaos, highlighting potential profits from short-term leveraged positions.
Greta Yuan, Head of Research at VDX, suggests that Bitcoin’s recent surge may have outpaced the market’s ability to price it accurately, necessitating a correction. Similarly, Adrian Wang, Founder and CEO of Metalpha, speculates that the correction could be attributed to market adjustments ahead of the halving event.
Despite the turbulence, Singapore-based QCP Capital remains optimistic about Bitcoin’s long-term prospects. They believe dips will be short-lived, emphasizing continued strong demand for BTC spot ETFs. Additionally, they note significant interest in BTC calls predicting prices between $100-150k by year-end.
The Liquidations Begin!
During the recent Bitcoin price drop, the crypto community witnessed a massive liquidation event, with a staggering $680 million in assets wiped out. Long orders bore the brunt, accounting for $545 million of the liquidated assets, while shorts contributed $134.6 million. Over 193,270 individuals were affected by this widespread liquidation, highlighting the crypto market’s inherent volatility. Notably, a significant $13.3 million liquidation order was recorded on the OKX – BTC -USDT-SWAP platform.
The roller coaster ride in the crypto world continues, with investors prepared for more twists and turns.
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