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Yesterday, we discussed the potential for high volatility on Monday, and as expected, it occurred. Bitcoin’s price held up to the $67,000 mark but then fell again as the US stock markets opened. This was not surprising and was an anticipated scenario. So, what caused the decline?
Why Is Bitcoin Falling?
Spot Bitcoin ETFs started to price in the BTC price drop after last Friday’s close. Crypto exchange investors had already priced in the increased tension from Iran’s attack. Over the weekend, Bitcoin’s price dropped to $60,600. However, Spot Bitcoin ETF investors could only bite their nails as the markets were closed.
Now, just the Blackrock ETF IBIT alone reached nearly $600 million in trading volume in about 1.5 hours. The drop in price and the increase in volume suggest that investors have begun selling. We will see the extent of the net outflows in the coming hours, and if ETF channel investors continue to see the current prices as not an opportunity to buy, the spot BTC price may continue to melt down in the exchanges.
Within a few hours, the Bitcoin price fell from $66,800 to $64,200. Altcoins are erasing some of their gains. ETFs are continuing the day with around a 3.5% loss.
