The cryptocurrency market experienced a sudden and unforeseen hit on April 12th, resulting in a spontaneous decline in the price of Bitcoin and other major altcoins. This unexpected turn of events led to massive liquidations across the board, leaving many traders in a state of shock and uncertainty. The exact cause of this widespread price dip remains shrouded in mystery, with various theories circulating within the crypto community.
According to data from CoinMarketCap, Bitcoin saw a significant slip of 4.49% in just a single day, dropping to as low as $66,052. This decline in Bitcoin’s price had a ripple effect on the entire market, with other major altcoins like Ethereum and Solana also recording substantial daily losses of 8.12% and 12.16%, respectively. The magnitude of these losses translated into a staggering 277,843 traders getting liquidated from their leverage positions, with the total value of crypto liquidations reaching a whopping $877.21 million within a 24-hour period.
Among these liquidations, long positions accounted for the majority of the losses at $782.98 million, while short traders suffered comparatively less at $94.24 million. A significant portion of these leveraged positions, amounting to $467 million, were closed within just one hour following the market downturn. The largest chunk of liquidations, totaling $369.85 million, occurred on the Binance exchange, with the single largest liquidation order of $7.19 million taking place in the ETH-USD market on the OKX exchange, as reported by Coinglass.
Interestingly, the decline in Bitcoin’s price seemed to coincide with a dip in the US stock market, as the S&P 500 index also saw a decline of 1.6% to trade as low as $5,108. This market crash followed recent CPI data, revealing a rise in the inflation rate to 3.5% year over year in March. These developments suggest that the US Federal Reserve (Fed) may delay any potential rate cuts in the near future, in an effort to curb inflation to its target of 2%. This cautious approach by the Fed could have a bearish impact on the overall crypto market, as rate cuts typically encourage investors to seek higher returns through riskier assets such as Bitcoin.
Despite the recent price downturn, there are some positive indicators for Bitcoin in the near future. Leading up to the upcoming Halving event on April 19th, Bitcoin has seen a rise in the number of non-empty wallets on its network. Blockchain analytics firm Santiment reported a notable increase of 370,000 BTC wallets holding active coins over the past six days. This upward trend in wallet activity has led analysts to anticipate a continued accumulation of Bitcoin leading up to the Halving event.
At the time of writing, Bitcoin was trading at $66,882, with a daily trading volume showing a significant increase of 44.80% at $43.80 billion. However, despite these positive developments, Bitcoin’s overall price performance has been lackluster in recent times, with declines of 1.33% and 6.20% over the last seven and 30 days, respectively. This suggests a sense of caution among investors in the current market environment.
The recent unexpected decline in the cryptocurrency market has left many traders and investors grappling with uncertainty and volatility. The interconnected nature of global markets, as evidenced by the correlation between Bitcoin’s price and the US stock market, underscores the complex and dynamic nature of the crypto landscape. While there are positive signs for Bitcoin in the lead-up to the Halving event, it is essential for market participants to exercise caution and conduct thorough research before making any investment decisions. As with any form of investment, there are inherent risks involved, and it is crucial for individuals to stay informed and make informed choices based on their own analysis and assessment of the market conditions.
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