Bitcoin Price Drops to $66,000: Blame the Halving or Something Else?

• Long positions contributed about 83% of the total liquidations.
• One analyst confirmed that the market generally becomes “quite volatile” after a Bitcoin halving.

Bitcoin (BTC) declined sharply during early Asian hours on Tuesday, falling 5.7% to a low of $66,000.

The sudden drop caused $200 million worth of liquidations from the entire crypto market over the past four hours, according to AMBCrypto’s analysis of CoinGlass data.

Long positions contributed about 83% of the total liquidations.

The decline caused most BTC derivatives traders to turn bearish on their assets.

Additionally, the Long/Short ratio fell sharply to below 1 in the last few hours at press time, indicating a sharp increase in bearish sentiment.

The decline comes after a weak start to the week for Bitcoin spot exchange-traded funds (ETFs).

AMBCrypto, using SoSo Value data, reported that ten new investment avenues tracking the spot prices of the world’s largest digital assets saw net outflows of $85 million on April 1.

Shivam Thakral, CEO of Indian cryptocurrency BuyUcoin, told AMBCrypto that the downward pressure was also a reaction to better-than-expected data from the US manufacturing sector.

Typically, risk-based markets like cryptocurrencies and stocks interpret these events as a lower likelihood of the US Federal Reserve cutting interest rates.

The incident also caused major Wall Street indices, such as the S&P 500 and Nasdaq Composite, to fall.

Read Bitcoin (BTC) Price Prediction 2024-25

However, Thakral reaffirmed that the cryptocurrency market generally becomes “quite volatile” following the Bitcoin halving. Therefore, participants can prepare for more volatility in the next two weeks.

According to data from Highblock Capital, market sentiment at press time was “extreme greed.” This could increase buying pressure in the coming days, which would help Bitcoin move further north.

This is an automatic translation of our English version.