Bitcoin Retreats to $64K, Historical Parallels Emerge with Liquidations Soaring Over $460M

April 2, 2024

Bitcoin, the pioneer cryptocurrency, took a sharp nosedive, finding itself perched at the $64,000 mark on Tuesday. This substantial double-digit drop hacked away over 12% from its lofty all-time high of approximately $73,500 not only echoes historical data but also triggered a flurry of liquidations, tallying around $460 million.

In mid-March, astute analysts keenly noted that the king of crypto was flashing early indicators of a bullish resurgence. These inklings, marked by discernible trading patterns and a robust influx of investments indicate that Bitcoin is primed for a significant upturn despite experiencing volatility.

Bitcoin wrapped up the previous month on a resounding high note, clinching its highest monthly and quarterly closing prices, both surpassing the formidable $70,000 benchmark. With an impressive year-to-date rally eclipsing 57%, the cryptocurrency was seemingly geared for continued success. 

Yet, as the calendar turned to a new quarter, April’s arrival brought an unforeseen twist. The first day saw Bitcoin’s value slide to $69,000, followed by a sharper decline to around $64,610 on Tuesday, swiftly erasing the gains accrued in the preceding month.

Historically, Bitcoin has exhibited notable patterns of volatility in April, providing insights into the cryptocurrency’s market behavior over the years. In April 2013, Bitcoin experienced significant price fluctuations, with its value surging from around $100 to over $200 early in the month, only to undergo a sharp correction, settling below $150 by month-end. 

Bitcoin experienced a significant downturn in April 2018, with its price dropping from around $7,000 to below $6,500 amid regulatory concerns and market uncertainty. Extreme volatility was also recorded in April 2021, when Bitcoin reached a new all-time high above $64,000 before experiencing a sharp correction to below $50,000 by the end of the month.

Bitcoin’s volatility in April across various years can be attributed to a multitude of factors spanning market sentiment, regulatory developments, macroeconomic trends, technological advancements, and investor behavior. Fluctuations in investor sentiment, often influenced by news regarding institutional adoption, regulatory clarity, or security breaches, can trigger significant price swings. 

Regulatory actions or announcements by governments worldwide regarding cryptocurrency can also cause uncertainty, leading to panic selling or increased confidence depending on the nature of the news.  Moreover, the king of crypto’s status as a store of value and hedge against inflation makes it susceptible to macroeconomic trends such as inflation rates, interest rates, and geopolitical tensions, with economic instability often driving investors to seek refuge in Bitcoin.

Despite historical volatility, industry watchers hold optimism for Bitcoin’s performance this year. A notable shift lies in the potential impact of spot Bitcoin exchange-traded funds (ETFs), a factor absent in previous years. These ETFs are poised to play a pivotal role in shaping the trajectory of the cryptocurrency, offering investors a regulated and accessible avenue to gain exposure to Bitcoin’s value.

The recent sharp decline in Bitcoin’s price sent shockwaves through the cryptocurrency market, prompting a flurry of liquidations totaling over $450,000 within the past 24 hours alone. Data from cryptocurrency futures trading platform CoinGlass revealed that an astonishing 139,090 traders were forced into liquidation, resulting in a cumulative liquidation volume soaring to an astronomical $468.69 million.

Liquidation Heatmap by CoinGlass

Of the staggering $460 million in liquidations, the majority stemmed from long positions, with $362.27 million wiped out. Conversely, short positions accounted for $106.41 million of the total liquidation volume.

As of 12:24 p.m. ET on Tuesday, Bitcoin was trading at $65,915.81, accompanied by a robust 24-hour trading volume of $48,042,158,821. This reflects a notable 5.07% decline over the past 24 hours, along with a 6.81% dip in the last seven days, juxtaposed against a 5.26% surge over the past 30 days. 

Despite fluctuations, Bitcoin maintains its unrivaled status as the king of crypto, boasting a formidable market cap of $1,296,645,895,899 and a circulating supply of 19,671,243 BTC, the latest data from CoinMarketCap showed.

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