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On the afternoon of March 20th, the price of Bitcoin once fell below the $61,000 mark, dropping to as low as $60,800. Compared to the historic highs set last week, the cumulative decline has reached 17.7%. The roller-coaster-like price fluctuations have left the hearts and wallets of most ordinary investors unable to cope.
Data shows that in the past 24 hours, over 140,000 people were liquidated, with a total liquidation amount of $543 million.
Continuous Plunge
In the previous week, the price of Bitcoin continued to soar, repeatedly setting new all-time highs, but then entered a downward trend. On the evening of March 19th, the price of Bitcoin fell below the $63,000 mark, with an intraday maximum decline of nearly 8%. In the afternoon of March 20th, the price of Bitcoin dropped below the $61,000 mark, reaching a low of $60,800.
In addition to Bitcoin, other cryptocurrencies in the virtual currency market also experienced a significant decline. Ethereum's price fell by more than 10% in 24 hours, while Dogecoin's price dropped by 14.3%.
The market generally believes that the recent sluggishness in Bitcoin prices is due to the slowdown in Bitcoin ETF inflows, the upcoming "halving" event, and the Federal Open Market Committee (FOMC) meeting in the United States.
A recent research report from the on-chain analysis platform CryptoQuant shows that after Bitcoin rebounded to a new all-time high recently, there have been significant changes in the market fundamentals, indicating a weakening demand from domestic investors in the United States. According to data tracked by CryptoQuant, the seven-day moving average of Coinbase Premium indicator has turned negative, indicating relatively weak net buying pressure from US investors.
Earlier, JPMorgan also pointed out in a report on Bitcoin that the "halving" event of Bitcoin will arrive in April, which may have a serious negative impact on the profitability of Bitcoin miners. The report warned that Bitcoin's price could plummet to $42,000 per coin as a result, representing a potential downside of over 30% from the current price.
The report detailed the reasons supporting this prediction. Firstly, the "halving" event will directly reduce the Bitcoin rewards received by miners, thereby reducing their income; secondly, due to the increase in the production cost of Bitcoin, miners with high electricity costs and low drilling efficiency will face greater pressure. This may lead to some miners exiting the market, further reducing the computing power of the Bitcoin network.
On the macro news front, the arrival of this week's "Super Central Bank Week" also had a deterrent effect on Bitcoin bulls. The Bank of Japan raised interest rates for the first time in 17 years on Tuesday, signaling the end of the more than ten-year global "negative interest rate era," while the Federal Reserve did not rule out the possibility of "hawkish" moves.
Extreme Trades
Under the extreme market conditions of Bitcoin's large price fluctuations, extreme trades are often easy to occur. According to Bloomberg on March 19th, sellers suddenly dumped more than 400 Bitcoins on the market in a short period of time, causing a flash crash in the price of Bitcoin on the BitMEX exchange, which briefly fell below the astonishing $9,000 per coin, while the price of Bitcoin on other exchanges remained above $66,000 per coin.
The event raised concerns among many investors about the reliability and stability of the BitMEX exchange, with users criticizing the vulnerability of the exchange. Subsequently, the BitMEX exchange urgently investigated the relevant abnormal trading activities. A BitMEX exchange spokesperson stated that the company has investigated the incident and found aggressive selling behavior in a few accounts beyond the expected market scope.
The spokesperson added that its system is operating normally, and all user funds are safe. At the same time, the BitMEX exchange has temporarily prohibited withdrawals from some accounts involved in the investigation.
Public information shows that BitMEX is a cryptocurrency derivatives trading platform founded in 2017, headquartered in the United States, and is one of the world's largest cryptocurrency derivatives exchanges.
It is worth noting that Arthur Hayes, the former CEO of BitMEX, previously stated that if the spot Bitcoin ETF is too successful, it may completely destroy Bitcoin. Arthur Hayes pointed out that spot Bitcoin ETF issuers hold a large amount of Bitcoin, which will negatively affect the transaction volume of the Bitcoin network, and miners will lose the incentive to maintain transaction verification. The eventual result is that miners will shut down their machines because they can no longer afford the energy required to operate them. Without miners, the network will die, and Bitcoin will disappear.
However, some investors were not so lucky. On February 23rd, the cryptocurrency exchange BitForex suddenly suspended withdrawals after withdrawing nearly $57 million from its hot wallet, and disappeared completely from the public eye. Prior to this, the platform delayed withdrawals citing wallet and website maintenance. On February 26th, the exchange's website was officially shut down. Users could not log into their accounts or load the webpage.
High Volatility
However, not all news in the market is pessimistic. On March 19th, the world's largest pension fund, the Government Pension Investment Fund of Japan (GPIF), announced that it will explore the possibility of diversifying part of its investment portfolio into the Bitcoin field. As part of its diversification efforts, the GPIF will collect information on illiquid alternative assets such as Bitcoin, gold, forests, and farmland.
In addition, Standard Chartered Bank raised its year-end price forecast for Bitcoin from $ |
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Post time 30-3-2024 04:25:42
