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- The crypto market has taken a significant pullback, causing Bitcoin and most altcoins to fall by more than 10% in the last 24 hours.
- Analysts have linked this sharp downturn to the fading Federal Reserve rate cut, recent crypto liquidation, substantial drop of spot Bitcoin ETF inflows, and Bitcoin and Ethereum options expiry today.
The crypto market is experiencing a dramatic downturn today (Friday) with prices plummeting sharply after soaring to unprecedented highs. As of the time of reporting, Bitcoin (BTC) had experienced a stark reversal, falling by 7.5% to trade at $67,876. Ethereum was also down by 7%, with the likes of Dogecoin (DOT), Toncoin (TON), and Shiba Inu (SHIB) down by more than 10% in just 24 hours.
Interestingly, the pullback coincides with a recent prediction by Digital asset analytics firm Swissblock, that Bitcoin could tumble to $58,000-$59,000.
According to Swissblock, the cool-off is imminent as the asset doubled its value from $38k without any serious pullback. This consolidation was equally forecasted by crypto investment services firm Matrixport. However, analysts believe that the halving event could be a crucial point to push the prices above their all-time highs. As predicted by Samson Mow and reported by Crypto News Flash, Bitcoin could hit $1 million this year or next year.
This bull market still has legs, but the divergence between a declining RSI and still high bitcoin prices could signal that BTC needs to consolidate before rallying again.
To examine the underlying conditions responsible for this ongoing broad market pullback, analysts came up with four main reasons.
Main Factors Causing the Bitcoin and the Altcoin Market to Bleed
The first has to do with the fading Federal Reserve rate cut. According to them, rate cuts usually depend on new economic data such as inflation and jobs. According to CME FedWatch data, there is a 54% chance of a 25 bps rate cut in June and a 50% chance of a 25 bps rate cut in July. In response to this, the US equity futures and global stock market recorded a decline.
The second reason for the market downturn is the crypto holdings liquidity. In the recent liquidation, $680 billion was flushed out of the market. According to Coinglass data, more than 192K traders liquidated in the last 24 hours. It is reported that this is the single liquidation order of BTC-USDT swap valued at $13.30 million on the OKX exchange. It is also reported that almost $543 million longs and $137 million shorts were liquidated, with Bitcoin and Ethereum experiencing $242 million and $115 million liquidation. Popular analyst Michael van de Poppe earlier predicted that short-term liquidation is imminent in the pre-halving phase.
Two More Reasons for the Pullback
Thirdly, the US Bitcoin spot Exchange Traded Fund (ETF) recorded a substantial drop in inflow by 80.6%. This brought the total amount to $133 million. Amid the backdrop of this, an analyst suspects that there could be a massive capital inflow as published by Crypto News Flash.
Finally, the market pullback is in response to the over $3 billion in Bitcoin and Ethereum options expiry today (March 15). 30,568 BTC options of notional value of $2.09 billion are also expected to expire today according to the report. 0.79 is said to be the put-call ratio, and the max pain point is $66,000. Today, 332,094 ETH options of a notional value of $1.24 billion are set to expire, with a put call ratio of 0.69 and a max pain point is $3,550. According to data, traders have booked profits above the max pain point, but are still bullish on Ethereum.
This article is provided for informational purposes only and is not intended as investment advice. The content does not constitute a recommendation to buy, sell, or hold any securities or financial instruments. Readers should conduct their own research and consult with financial advisors before making investment decisions. The information presented may not be current and could become outdated.
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