The drop in Bitcoin’s price to $66,013 today on Bitstamp seems linked to two main factors: GBTC outflows and decreased odds of an interest rate cut.
Bitcoin had been rising for six months straight, hitting levels not seen since 2012, but now it’s down over 4% to $66,761.
Bitcoin ETF Outflows and Rate Cut Odds Impact Bitcoin’s Price
The recent drop in Bitcoin’s price is mainly due to people pulling their money out of Bitcoin ETFs. On April 1st, Grayscale’s GBTC saw a big outflow of $302 million, which was more than expected. Overall, Bitcoin ETFs lost $85.7 million on Monday, as products from BlackRock and Fidelity couldn’t make up for GBTC’s losses.
Another reason for Bitcoin’s price going down is that bond traders are changing their minds about how many times the Federal Reserve will lower interest rates. They’re not so sure there will be a rate cut in June anymore, and this uncertainty is making risky investments like Bitcoin less attractive.
Christopher Waller from the Federal Reserve said they might delay rate cuts because inflation isn’t as high as they thought. Also, according to the Financial Times, only a few Federal Reserve officials want to cut rates three times in 2024. Raphael Bostic, from the Atlanta Federal Reserve Bank, even suggested there might only be one rate cut this year. All these factors are causing Bitcoin’s price to drop.
Crypto Market Hit by Big Sell-Offs: Lots of People Losing Money
In the past 24 hours, the cryptocurrency market has witnessed a significant wave of liquidations, with over $500 million worth of cryptocurrencies being liquidated, as reported by CoinGlass. Long positions bore the brunt of this wipeout, accounting for the majority at $417 million.
This sweeping liquidation has affected a substantial number of traders, surpassing 155,000 individuals. Notably, the largest single liquidation order amounted to a staggering $7.48 million. This event underscores the volatility and risk inherent in cryptocurrency trading, impacting traders across various platforms.
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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