The recent plunge in Bitcoin's price, dipping below $66,699 before swiftly rebounding above $67,730, can be attributed to several key factors. Firstly, a staggering 80.6% drop in ETF inflows within a 24-hour period intensified market volatility, contributing to the initial decline. Additionally, the release of the latest U.S. economic CPI data heightened concerns regarding inflation, leading to speculation about the Federal Reserve's monetary policy. Amid rumors suggesting the Fed's intention to maintain higher interest rates for an extended period, downward pressure on Bitcoin's price intensified.
BTC's downward trajectory was exacerbated by a familiar trend observed during U.S. market openings, often coinciding with Bitcoin's decline. This synchronized movement mirrored losses in other assets like gold and the Nasdaq index, further amplifying market sentiment. While some analysts view Bitcoin's retreat as a natural correction following rapid growth, others cite market overheating and uncertainties surrounding the upcoming mining reward halving as contributing factors.
Despite the temporary setback, there remains optimism among industry experts regarding Bitcoin's long-term prospects. Singapore-based QCP Capital, for instance, anticipates short-lived dips, emphasizing continued strong demand for BTC spot ETFs. Additionally, they note significant interest in BTC calls predicting prices between $100,000 and $150,000 by year-end, underscoring confidence in Bitcoin's trajectory.
The recent price drop also witnessed a significant liquidation event within the crypto community, with $680 million in assets being wiped out. Long orders bore the brunt of this liquidation, accounting for $545 million of the total, while shorts contributed $134.6 million. The widespread impact affected over 193,270 individuals, underscoring the inherent volatility of the crypto market. Notable among these liquidation orders was a significant $13.3 million on the OKX – BTC -USDT-SWAP platform.
