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On March 15th, Bitcoin dropped below $67,000, with a 24-hour decline expanding to 8.18%. Bitcoin has been consolidating at high levels for several days. Recently, the price of Bitcoin has continued to rise, breaking through $73,000 on March 12th, hitting a new all-time high. In the following days, it oscillated above $70,000. On the morning of March 15th, Bitcoin suddenly plunged deeply. According to Tradingview data, Bitcoin fell below $67,000, with the price at $67,314 at the time of writing, and the 24-hour decline expanded to 8.18%.
According to Coinglass data, the entire network liquidated $220 million in the past 4 hours, with long positions liquidated at $186 million and short positions at $34.14 million.
Why did it drop?
The community believes that the US February Producer Price Index (PPI) data may be one of the important reasons affecting the trend of the crypto market. The February PPI rose by 0.6% month-on-month, higher than the economists' expected 0.3%, indicating that US inflation still has stickiness, and the Fed may maintain high interest rates for a longer period. As a result, major US stock indices fell. The S&P 500 fell by 0.3%, the Dow Jones Industrial Average fell by 0.4%, and the technology-heavy Nasdaq Composite Index fell by 0.3%.
JPMorgan said in a report that Bitcoin's record rise means that the bubble in risk assets is getting bigger, which may lead the Fed to postpone its interest rate cut plans later this year. Therefore, the disclosure of this US economic data naturally makes the capital market adopt a conservative attitude towards the short-term volatility of Bitcoin.
Many analysts pointed out that Bitcoin may enter a consolidation period, even if a 20% pullback is possible, as the momentum of reaching new highs in the past two weeks begins to weaken.
In addition, ETF outflows exceeded $200 million, and BNY Mellon's IBIT faced more challenges. On March 15th, according to farside investors data, the current inflow data of BNY Mellon's IBIT has not been disclosed, but with the release of Valkyrie's BRRR data (net inflow of $9.4 million), the current (non-final data) net outflow of the US Bitcoin spot ETF reached $212 million. BNY Mellon's IBIT net inflow yesterday needs to exceed $212 million to maintain an overall net inflow.
Could it retrace to $50,000 before hitting a new high?
On March 1st, Galaxy Digital founder and CEO Michael Novogratz said in an interview with Bloomberg that Bitcoin may experience some adjustments before hitting a new all-time high and "substantially rising" by the end of the year.
Michael said: "If there is a retracement, it may retrace to around $50,000, and then hit a new high." Michael believes that compared to the recent bull market in 2021, the leverage ratio of large institutional participants is lower in the current cycle, but the leverage ratio of retail traders is too high.
On March 8th, Bitcoin first broke through $69,000, reaching a new all-time high. However, it retraced nearly $10,000 overnight, with the entire network liquidating $1.18 billion in 24 hours. Bitcoin's volatility index once reached 78.81, close to the highest value in a year.
Regarding Bitcoin's dive, the founding partner of Matrixport also expressed on social media platforms that "in a bull market, a healthy flash crash of 5% is quite healthy."
Matrixport analyst and 10X Research researcher Markus also predicted that Bitcoin would reach $125,000. Now there is still a certain distance from this number, so there is no need to worry too much about a sharp retreat in the bull market, especially at the threshold of Bitcoin's new all-time high, as retracements are a natural phenomenon. |
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Post time 24-3-2024 08:17:22