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Today’s decline in Bitcoin price occurred due to a combination of factors including mass liquidations, macroeconomic pressures, Bitcoin ETF dynamics, and the negative Coinbase premium effect. These factors collectively led to a noticeable drop in Bitcoin’s price. As BTC fell, this situation also affected altcoins. There were also declines in ETH, BNB, ADA, XRP, and AVAX. Let’s look at the key factors in the decline.
Massive Liquidations
Today, the Bitcoin and cryptocurrency market experienced a critical price drop under the influence of a wide-scale liquidation event in the futures market. According to Coinglass data, liquidations in crypto assets of 245,739 investors reached $812.29 million in the last 24 hours. These liquidations caused Bitcoin’s price to drop by 8% in just a few hours, from $72,000 to $66,500.
Bitcoin’s price experienced a brief recovery, rising to the $68,000 level. However, as of March 14, it is currently about 10% below its all-time high of $73,700.
80% of these liquidations originated from long positions, amounting to a total value of $663.22 million. The remaining $149.08 million came from liquidations of short positions.
Macroeconomic Conditions Impact BTC Price
The macroeconomic environment is creating additional pressure on Bitcoin‘s value. The Producer Price Index (PPI) data released yesterday in the US showed a 0.6% increase in February, exceeding the expected 0.3%. This, coupled with the Consumer Price Index (CPI) also coming in higher than expected recently, led to an increase in US bond yields, causing fluctuations.
The benchmark 10-year yield rose by 10 basis points to 4.29%, while the two-year yield increased from 4.63% to 4.69%. These developments caused investors to adjust their expectations for the Federal Reserve’s interest rate policies for 2024.
Negative Coinbase Premium and Calm Bitcoin ETF Market
Bitcoin’s retreat below the $70,000 threshold is associated with the Coinbase premium falling into negative territory for the first time since February 26. This indicates a bearish trend in the US markets. The Coinbase exchange, which holds most of the spot Bitcoin ETFs, experienced a noteworthy development in connection with this decline. This event is due to significant sales in Grayscale’s GBTC fund while spot ETFs continue their relatively calm trajectory.
Interest in spot ETFs, which saw a record net inflow on March 12, has recently dropped to as low as $132.7 million. Blackrock contributed the most with $345.4 million, while Fidelity and ARK saw minimum inflows of $13.7 million and $3.5 million, respectively. Outflows from GBTC were reported to be $257.1 million, which is in line with the averages.
Crypto analyst WhalePanda commented on the situation, noting that despite the decreased inflows, “$132.7 million still equals 2 full days of mining rewards.” As Bitcoin’s price fell, Ethereum’s price also dropped to $3,691. BNB was trading at $583, while XRP fell to $0.62. ADA was trading at $0.7, and AVAX at $51.10.
