The price of Bitcoin has experienced a decline, crashing to $65,000 price ahead of the fourth halving.
The recent drop in Bitcoin’s price represents a 9.6% decline from its peak of $73,798 reached in early March.
Asides from Bitcoin price decline, the broader crypto market also recorded losses, with Ethereum, Solana’s SOL and Dogecoin registering more significant losses.
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In the wake of this downturn, the crypto derivatives markets saw the liquidation of Bitcoin long positions amounting to $135.3 million wiped out.
The primary driver behind this swift decline was predicted to be widespread liquidations, notably on major exchanges like Binance. A staggering 121,325 traders faced liquidation within the last 24 hours, collectively losing a whopping $395.10 million.
Analysts at QCP Broadcast disclosed that the significant rate at which the price of Bitcoin and Ethereum declined on Tuesday, was due to large-volume liquidations on retail-heavy exchanges. Furthermore, the perpetual funding rate on platforms like Binance dropped from as high as 77% to flat, stressing asset prices in the spot market.
Also, Bitcoin ETF flows were back in the red again on Monday, April 1, following another large outflow from Grayscale. The aggregate outflow for the eleven spot-based investment products was $85.7 million, or 1,200 BTC, according to preliminary data from Farside Investors.
However, despite this downturn, trading volume has seen a remarkable surge, skyrocketing by a staggering 66.8% to reach $40.5 billion,
The correction in Bitcoin and Ethereum prices was followed by likely capital rotation into meme coins as Solana-based assets noted double-digit gains on Tuesday.
In the ongoing market cycle, meme coins have yielded consistent gains for traders during corrections in large assets. However, they have also registered sharp corrections afterwards.
The gradual decline in the price of Bitcoin and other crypto assets, has left investors and crypto enthusiasts alike concerned.
This decline occurs with just 18 days remaining until BTC’s fourth halving event, which will slash the block rewards from 6.25 bitcoins to 3.125 bitcoins per block after the halving.
Notably, a flood of inflows into US spot-Bitcoin exchange-traded funds has begun to cool, weighing on the largest digital asset. The supply of new Bitcoin tokens is set to halve this month, a four-yearly event that some traders view as a prop for the original cryptocurrency, as reported by Bloomberg.
According to insights from Matt Simpson, an analyst at City Index, he noted that Bitcoin tends to ride a rollercoaster of peaks and troughs after hitting record highs. The impending Bitcoin halving, scheduled for April, is anticipated to drastically reduce the creation of new Bitcoins to just 450 per day, further stoking market uncertainty.