Bitcoin’s Dramatic Dive: Record Liquidations, Shifting Market Sentiment, and the Impact of Economic Data
In a surprising turn of events, the price of Bitcoin (BTC) underwent an unexpected downturn on March 15, dropping significantly from its all-time high. The cryptocurrency market was shaken as the price of Bitcoin plummeted to $68,241, a decrease of 7.5% from its recent peak of $73,737.
Record Liquidations
The sudden decline in Bitcoin’s price triggered an avalanche of liquidations, totaling over $661 million within a 24-hour period. Approximately 200,000 traders were affected by this market turbulence, highlighting the high volatility that characterizes the cryptocurrency space.
While Bitcoin rebounded to briefly regain the $68,000 level, it faced strong resistance and subsequently slipped further to around $67,500. This represented an 8.3% decrease from its recent peak. The majority of liquidations targeted long positions, totaling $525.2 million, while short positions faced liquidations amounting to $136.5 million.
Market Sentiment Shift
Recently, there has been a noticeable shift in market sentiment, with concerns arising over the decline in Bitcoin Exchange-Traded Fund (ETF) inflows. According to data from Swyftx, lead analyst at an Australian crypto exchange, potential corrections back to the low $60,000 or high $50,000 levels could occur if ETF inflows continue to decline. He emphasized that investors are wary of inflation data and underscored the importance of ETF volumes as determinants of market direction.
Greeks Live Observations
Greeks Live, a crypto derivatives tooling provider, has reported a change in market tempo, potentially signaling a shift in the narrative regarding ETF inflows. The decline in Bitcoin ETF inflow volumes, down by 48% from their 14-day average, has raised concerns among investors. Data from Farside Investors revealed that aggregate spot Bitcoin ETF inflows reached a monthly low of $133 million on March 14.
Further Downside for Bitcoin
CrediBULL Crypto, a well-known crypto trader and analyst, anticipates further downside for Bitcoin. He projects a potential decline to the $63,000 to $64,000 range due to the depletion of open interest (OI) in derivatives markets following the recent price drop. Additionally, economic data released in the United States, particularly Producer Price Index (PPI) and Consumer Price Index (CPI) figures, has fueled market uncertainty.
Impact of Economic Data
The economic data released in the United States this week, including higher-than-expected PPI and CPI figures, has contributed to market jitters. Anticipated prolonged high rates from the Federal Reserve in response to elevated inflation levels have intensified investor concerns. Disappointing economic data has also dampened hopes for imminent interest rate cuts, leading to a retreat in stock markets across Asia.
