Bitcoin (BTC) experienced a quick and significant drop in value on Friday, reaching a low of $65,110 after touching the $71,000 mark momentarily. Currently, Bitcoin is rebounding at $67,553, representing a decrease of over 5% within the last 24 hours.
The sudden drop in Bitcoin’s price from $71,000 to $65,000 took the crypto market by surprise, yet, according to on-chain information, this decline wasn’t completely unexpected.
On April 11, cryptocurrency research firm Kaiko announced on Twitter that there was growing anticipation for market turbulence in the short term. The reason being, the implied volatility for contracts expiring within the next fortnight had surged from 59% to 71% within a span of two days.
Additionally, two significant red flags had been waving, signaling an upcoming adjustment before it occurred.
Based on the data from cryptocurrency analysis company CryptoQuant, certain signs of weakness have emerged since late March. However, these signals may have been overlooked due to the overall excitement and bullish sentiment in the market.
Since late March, traders’ unrealized profits and the actual sale prices of cryptocurrencies have indicated a weakening trend, according to CryptoQuant. Therefore, it is recommended that the crypto community closely monitor these important indicators if the ongoing market correction continues.
When Bitcoin dipped below $66,000 for the first time since April 4, resulting in a significant $920 million worth of liquidations over the past day. Furthermore, as reported by Santiment, both the S&P 500 and gold have experienced similar declines, hinting at growing worries about consumer price index (CPI) and inflation across various markets.
Market transitions into euphoric phase
Based on Glassdoor’s latest analysis, there’s been an increase in profits for investors, signaling that the market has shifted into a state of heightened excitement.
In simpler terms, the current market’s excitement level may not be as advanced as past peak breaks. Historical market euphorias have often been followed by price decreases exceeding 10%, and many of these drops were more severe, averaging around 25%.
At current pricing, Bitcoin is down 8.32% from its all-time high of $73,750 set in mid-March.
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2024-04-13 19:08