Bitcoin plunges amid $426 million in liquidations

Bitcoin registered a slight price decline to trade below $67,000 on Tuesday morning, erasing gains from the previous week. According to data from CoinGecko, the asset is presently trading at $66,139, registering a loss of 4.6% on the day and 6% on the week.

Bitcoin registers a significant decline in value

The entire crypto market followed in the same direction, experiencing a staggering decline of 5.2% to $2.6 trillion, wiping out more than $122 billion from the crypto market. Aside from stablecoins, digital assets in the top 30 according to market cap registered significant losses, with Ethereum registering a 6% drop to trade at $3,331.

However, the largest losses in that category were posted by Bitcoin Cash and Aptos, registering losses of 9.9% and 13.5%, respectively. According to data from CoinGlass, the crypto market also witnessed the liquidation of over $426 million in the last 24 hours, with $342 million representing figures from long liquidations.

In addition, Bitcoin was responsible for over $90 million in longs liquidated over the night. This price decline is coming off the back of an impressive performance from the US dollar, with its index (DXY) hitting above 105 for the first time this year. The index is a metric that measures the value of the US dollar against several major currencies, including the euro, yen, and Canadian dollar.

Institutional presence and the upcoming halving

The market-wide decline is also coming at a period of increased volatility as the market prepares for the upcoming halving event scheduled to take place in April. In the halving event, miners rewards will be slashed in half, and it is expected to help propel the price of Bitcoin upwards.

However, there have been debates about this upcoming halving being priced in, with some analysts noting that it might not produce the expected surge in the price of the asset due to a ‘crisis of faith’ among investors. The upcoming halving is also coming at a time when Bitcoin has already touched an all-time high, influenced by the recent approval of spot Bitcoin ETFs in the United States.

The drastic fall in supply caused by institutional investors buying up available Bitcoins along with the halving has been credited by analysts as a bullish sign. Moreso, a new Coinbase report has suggested that Q2 could be a rewarding period for the crypto market. According to the crypto exchange, the market could be triggered by the heavy institutional presence in the spot Bitcoin ETF market.