What’s Causing the Sudden Drop in Bitcoin Price?

Bitcoin Down BTC

Bitcoin’s price experienced a 5% pullback following the lackluster debut of Bitcoin and Ether ETFs in Hong Kong. Concerns over high leverages liquidation also contributed to the decline. Despite hopes for a relief rally, the ETFs’ launch failed to meet market expectations.

The disappointing debut in Hong Kong added to the market’s concerns. Additionally, U.S. Spot Bitcoin ETFs saw their fourth consecutive day of outflows, totaling over $51 million. Over the past three weeks, crypto investment products witnessed continuous outflows, with the largest being $435 million recently.

Crypto Market Suffers Amid Lackluster Debut of Hong Kong ETFs

The debut of six spot Bitcoin and Ethereum ETFs in Hong Kong disappointed, recording only $12 million in trading volume on the first day, a stark contrast to the U.S. Bitcoin ETFs’ debut.

Following the underwhelming ETF volume, traders swiftly began shorting Bitcoin, causing its price to plummet to $61,451. This sudden drop triggered a broader market selloff, resulting in investors losing nearly $130 billion as the crypto market cap dipped to $2.27 trillion.

The market downturn led to over $205 million in liquidations across various crypto assets. Long positions worth $145 million and short positions exceeding $60 million were among those liquidated.

Furthermore, more than 66,000 traders faced liquidations, with the largest single liquidation occurring on Binance, where someone sold ETH valued at $5.03 million. ETH’s price also experienced a decline of over 5% in the past 24 hours.

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Source: CoinGlass

Market Updates: Oil Up, Gold Down, Dollar and Treasury Yields Rise

Oil prices saw a modest increase of 0.23%, while gold prices declined by 0.71% today. Investors are eagerly awaiting the Federal Reserve’s policy decision and non-farm payrolls data scheduled for later this week.

In parallel, the US dollar index (DXY) has edged higher towards 106, showing a 0.10% increase to reach 105.69. Concurrently, the US 10-year Treasury yield (US10Y) surged to a six-month peak, reaching 4.636%. These movements suggest continued pressure on Bitcoin, as it typically moves inversely to the dollar index and Treasury yields. However, there is potential for a reversal in Bitcoin’s fortunes with the upcoming Q2 2024 Treasury refunding announcement.

The Federal Reserve meeting scheduled for May 1 holds significant implications for both crypto and stock markets. Chairman Jerome Powell’s stance, particularly regarding potential rate cuts, will be closely monitored. Recent data indicating higher-than-expected inflation levels has spurred discussions within the Fed, adding to market uncertainty.

Renowned crypto analyst Rekt Capital has expressed caution, suggesting that Bitcoin remains in a precarious position and could drop below $60,000. However, he also hinted at a potential rally commencing in mid-May.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.


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  • Asad

    Asad is a dynamic and talented cryptocurrency content author who brings a wealth of knowledge and enthusiasm to every article. With a deep understanding of blockchain technology and a passion for digital assets, Asad's writing is both informative and engaging.

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