Bitcoin price fluctuated between $68,620 and $73,000 in the last 24 hours, recovering to $72,000 after a dip. As expected, BTC is rising with the start of the Asian markets. The last sell-off could trigger a similar movement in the next 48 hours to that seen on March 5th.
Crypto Prices Drop and Rise
Bitcoin‘s price fluctuation has certainly come at a cost. After a $4,500 drop and subsequent rise, massive liquidations were triggered in futures trading. The size of the liquidations in the last 24 hours reached $361 million. Both bears and bulls saw significant losses due to being caught unprepared for the volatility.
According to Coinglass data, the price fluctuation mainly caused the liquidation of long positions. Short sellers’ losses were limited to $103 million. The rapid drop of the BTC price to $68,620 levels was not expected by everyone.
We had seen the last major liquidation of this scale on March 5th, when the price dropped from $69,000 to $60,800.
Why Did Crypto Prices Fall?
Firstly, the triggering event in terms of news flow was the U.S. inflation data coming in slightly above expectations for the month. While more inflation decline would require the Fed to ease monetary policy, February’s data suggests it may not be as easy as thought. Most investors in risk markets are currently ignoring this signal.
10x Research commented on the increase in volatility, saying;
“Bitcoin failed to rise during the trading hours when ETFs started trading, making investors more tense about a potential price correction. There is also a significant FOMO happening. Therefore, traders monitoring the ETF channel may have become concerned about a downturn.”
According to research firm S3 Partners, short sellers have lost over $6 billion in the first 11 months of 2023. Bitcoin, on the other hand, has increased by 130% during this period. This highlights the poor situation for investors who took positions against the trend.
Bear market analyst Capo still suggests we are on the verge of a major price correction. The only issue is that he has been writing this for roughly 365 days.
