|
|
The cryptocurrency market is experiencing a significant downturn, with Bitcoin prices plummeting sharply. The drop in Bitcoin's value has triggered a domino effect, affecting various alternative coins, including Ethereum, BNB, ADA, XRP, and AVAX. Several factors, including mass liquidation and macroeconomic factors, along with the decline in Coinbase's premium and sluggish activity in the Bitcoin ETF space, have prompted this market shift.
Mass liquidation shakes the market
The market has seen a severe decline primarily due to widespread liquidation. Data from Coinglass shows that over 245,000 investors were affected by liquidation in a single day, amounting to a staggering $812 million. The majority of this figure comes from liquidated long positions, leading to an 8% significant drop in Bitcoin prices within hours.
After the price drop, Bitcoin temporarily recovered some losses, reaching $68,000, but still about 10% lower than its peak. Long liquidations accounted for 80% of the total, totaling over $663 million, while short liquidations accounted for the remaining $149 million.
Bitcoin feels the weight of macroeconomic trends
Macroeconomic indicators have exacerbated market unease, with the US Producer Price Index rising by 0.6%, double the forecasted figure. This growth, coupled with Consumer Price Index higher than expected, led to an increase in US bond yields. The resulting change in interest rate expectations affected investors' anticipation of the policies the Federal Reserve is set to enact.
The rise in the 10-year yield and a slight increase in the 2-year yield reflect these macroeconomic changes, impacting investment strategies and market sentiment.
ETF activity and Coinbase premium trend
Bitcoin's dip below the $70,000 mark is also attributed to the negative shift in Coinbase's premium, indicating bearish trends in the US market. Grayscale Bitcoin Trust (GBTC) experienced significant sell-offs, contrasting sharply with the relatively stable spot ETF market. While interest in spot ETFs surged previously, current activity has decreased, with BlackRock seeing the most inflow, and GBTC outflows aligning with the average figure.
Cryptocurrency analyst WhalePanda pointed out that the decrease in inflows still represents a significant portion of the mining industry's new Bitcoin supply. In addition to Bitcoin's decline, prices of Ethereum and other major cryptocurrencies have also dropped, with BNB, XRP, ADA, and AVAX trading at lower prices.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies are highly volatile and therefore involve risks, and should conduct their own research. |
|
Post time 27-3-2024 09:25:20