The decline is said to be a projection of an increased interest rate, which has caused a decline in ETF inflows
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The recent sharp decline in Bitcoin’s price has led to significant liquidations among cryptocurrency traders, surpassing $661 million within the last day, impacting close to 200,000 traders.
During the early trading hours of March 15, Bitcoin experienced a rapid 7.5% drop, plummeting from $72,000 to $66,500.
Although the asset saw a minor recovery, briefly reaching the $68,000 mark, it faced resistance and subsequently declined further to approximately $67,500 at the time of reporting, based on Tradingview data. This marks an 8.3% decrease from its all-time high of $73,737 on March 14.
Long positions bore the brunt of the recent liquidations, comprising 80% of the total and resulting in $525.2 million in liquidations over the past 24 hours, while short positions accounted for $136.5 million.
Read Also: What Triggered Tuesday’s Market Slide?
Within a single day, the cryptocurrency market capitalization experienced a significant 7.3% decline, falling to $2.68 trillion as approximately $175 billion exited the space.
Interest Rate Responsible For Dump?
The recent release of economic data in the United States likely contributed to the accelerated declines in various markets.
The latest Producer Price Index (PPI) data surpassed expectations, leading to projections of prolonged high interest rates by the Federal Reserve.
Furthermore, the Consumer Price Index (CPI) data, which came in hotter than anticipated earlier in the week, is believed to have worsened the economic outlook for the United States.
In response to this data, stock markets in Asia retreated on Friday as hopes for imminent lower interest rates were dashed by the disappointing economic indicators from the U.S.
Decline in ETF Volumes
Analysts have predicted that there could be a correction back into the low $60,000 or high $50,000 level if ETF volumes continue to decline as a lot of investors are concerned about hot inflation data.
Thus if there’s a sustained downdraught in ETF volumes, there could be a significant correction.
Bitcoin ETF [inflow] volumes were down 48% on their 14-day average yesterday and Aggregate spot Bitcoin ETF inflows were just $133 million on March 14, the lowest they have been this month according to data from Farside Investors.
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Tony Chimdiuto