The value of Bitcoin (BTC) took a surprising dip, falling beneath $60,000, causing confusion among investors and experts as they attempted to identify the reason behind this sudden decrease.
Bitcoin, the pioneering cryptocurrency and currently the largest in size, dipped beneath $60,000 for the first time in over a month due to heightened volatility. This drop occurred prior to the anticipated halving event slated for April 20.
On Wednesday, the biggest digital currency dropped as low as $59,648 prior to recovering some of its decline. Currently, Bitcoin has fallen by almost 15% from its peak price of $73,750, which it reached on March 14th.
Based on current market information, it appears that one major reason for Bitcoin’s recent price drop could be a large number of investors being forced to sell their holdings due to high levels of borrowed capital (leverage). As the price decreased, these leveraged positions became unsustainable and had to be liquidated. This mass selling then intensified the downward trend in Bitcoin’s value.
It is thought by Bloomberg that the significant decline in Bitcoin’s value could be due to a large number of long positions on cryptocurrencies being closed out last Friday, resulting in around $780 million being withdrawn from the market within a day.
Based on information from CoinGlass, approximately $251 million worth of Bitcoin positions have been liquidated due to its recent decline. Out of this amount, positions with bullish bets on the uptrend accounted for around $173 million.
When many traders holding long positions had to sell due to the high number of them, this put downward pressure on the price and caused it to drop even further. This selling then led to more long positions being liquidated, creating a loop that pushed Bitcoin’s value below $60,000.
Currently, Bitcoin was experiencing a slight uptick, increasing by 0.85% in the previous 24 hours to approximately $62,700, with investors quickly purchasing at the dip. According to crypto expert Ali’s analysis, over 27,700 Bitcoins, equivalent to roughly $1.72 billion, have recently been transferred to wallets that have never spent any funds, signifying accumulation activity as the Bitcoin price declined.
After the recent cryptocurrency market sell-off, some market experts believe the long-term perspective for Bitcoin remains optimistic.
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2024-04-18 15:35