In a tumultuous turn of events, the price of Bitcoin (BTC) experienced a significant downturn, plummeting to $68,241, down from its recent all-time high of $73,737. This abrupt drop of 7.5% occurred within a few hours of trading on March 15, shaking the cryptocurrency market.
Record liquidations
The sudden decline in Bitcoin’s price triggered a cascade of liquidations, surpassing a staggering $661 million within 24 hours. This market turbulence affected nearly 200,000 traders, highlighting the high volatility inherent in the cryptocurrency space.
While Bitcoin briefly rebounded to reclaim the $68,000 level, it faced strong resistance, slipping further to approximately $67,500. This represents an 8.3% decrease from its recent peak. Most liquidations, approximately 80%, targeted long positions, totaling $525.2 million, while short positions faced liquidations amounting to $136.5 million.
Analysts express concerns over the sustainability of Bitcoin’s bullish momentum, particularly in light of declining exchange-traded fund (ETF) volumes. Pav Hundal, lead analyst at Australian crypto exchange Swyftx, warns of a potential correction back to the low $60,000 or high $50,000 levels if ETF volumes continue to decline. He highlights investors’ apprehensions regarding inflation data and emphasizes the significance of ETF volumes as a determinant of market direction.
Market sentiment shift
Greeks Live, a crypto derivatives tooling provider, observes a recent change in market tempo, signaling a potential shift in the narrative regarding ETF inflows. The decline in Bitcoin ETF inflow volumes, down by 48% from their 14-day average, raises investor concerns. According to data from Farside Investors, aggregate spot Bitcoin ETF inflows reached a monthly low of $133 million on March 14.
CrediBULL Crypto, a prominent crypto trader and analyst, anticipates further downside for Bitcoin, projecting a potential decline to the $63,000 to $64,000 range. He notes the depletion of open interest (OI) in derivatives markets following the recent price drop. The release of economic data in the United States, particularly Producer Price Index (PPI) and Consumer Price Index (CPI) figures, further fueled market uncertainty.
Impact of economic data
The U.S. economic data released this week, including higher-than-expected PPI and CPI figures, has contributed to market jitters. Projections for prolonged high rates from the Federal Reserve in response to elevated inflation levels have intensified investor concerns. The disappointing economic data has also dampened hopes for imminent interest rate cuts, leading to a retreat in stock markets across Asia.
