Key Reasons Why Bitcoin (BTC) Just Collapsed to $66K

Tue, 04/02/2024 - 05:29
Cover image via
Read U.TODAY on
Google News

The price of Bitcoin, the leading cryptocurrency, collapsed to as low as $66,013 earlier today on the Bitstamp exchange. 

This came after it recorded its sixth consecutive month in the green, matching the record that was set all the way back in 2012.

The flagship cryptocurrency is currently changing hands at $66,761 after shedding more than 4%.

Key reasons why Bitcoin is crashing 

Bitcoin ETF outflows once again appear to be one of the main bearish headwinds.

On Apr. 1, Grayscale's GBTC recorded another $302 million worth of outflows. This sum is "higher than expected," according to leading ETF analyst James Seyffart.

Overall, Bitcoin ETFs recorded a net total outflow of $85.7 million on Monday, with BlackRock's and Fidelity's products failing to offset GBTC's losses. 

Solana Founder Introduces New Coin as April Fools' Joke

Apart from the seemingly waning demand for Bitcoin ETFs, the Bitcoin price has likely been hit by bond traders pricing in fewer Federal Reserve rate cuts. In fact, the odds of a June rate cut have now dropped below 50%. This, of course, is putting a lot of pressure on risk assets of the likes of Bitcoin that typically benefit from looser monetary policy. 

Last week, Federal Reserve official Christopher Waller said that rate cuts could be postponed due to disappointing inflation data. Only a minority of Fed officials support three rate cuts in 2024, according to a report by the Financial Times. Atlanta Federal Reserve Bank President Raphael Bostic recently said that there would likely be only a single rate cut this year.

$500 million worth of crypto liquidated 

According to data provided by CoinGlass, more than $500 million worth of cryptocurrencies has been liquidated over the past 24 hours alone. Of course, long positions account for the vast majority of the wipeout ($417 million). More than 155,000 traders have been liquidated, with the single largest liquidation order amounting to $7.48 million.