The crypto market suffered an unexpected blow on April 12 when a spontaneous drop in the price of Bitcoin and prominent altcoins led to massive liquidations. The origins of this widespread price decline remain largely unknown, alongside a plethora of plausible reasons, including a recent price correction in the US stock markets.
Nearly $500 Million Liquidated in One Hour Amid Crypto Flash Crash
According to data from CoinMarketCapBitcoin fell 4.49% over the day, falling to $66,052. As expected, BTC’s decline reverberated through the market, with prominent altcoins Ethereum and Solana posting daily losses of 8.12% and 12.16% respectively.
As previously mentioned, these losses translated into 277,843 traders losing their leveraged positions as total crypto liquidations reached $877.21 million in the past 24 hours, based on data from Coinglass. Of these figures, long positions accounted for $782.98 million, while short traders lost only $94.24 million.
Notably, $467 million in leveraged positions were closed within an hour due to a general price decline. The highest number of liquidations of $369.85 million was recorded on Binance, while the largest liquidation order worth $7.19 million occurred on the ETH-USD market on the OKX exchange.
Source: Coinglass
Interestingly, Bitcoin’s price drop correlated with a dip in the US stock market, as the S&P 500 index fell 1.6% to a low of $5,108. This market crash was preceded by recent CPI data, which showed inflation rose to 3.5% year-on-year in March.
Such reports only indicate that the US Federal Reserve (Fed) may not make interest rate cuts once it aims to reduce inflation to its annual target of 2%. This forecast is quite bearish for the crypto market in general, as interest rate cuts by the Fed allow investors to comfortably look for risky assets like BTC with the potential of high returns.
Bitcoin experiences network growth as halving approaches
On a more positive note, Bitcoin has recorded an increase in the number of non-empty wallets on its network ahead of the Halving event on April 19. Blockchain analytics platform Santiment reported an increase of 370,000 BTC wallets with active coins in the last six days. Interestingly, the analytical team backs investors to maintain this accumulative trend during Bitcoin’s halving.
At the time of writing, Bitcoin was trading at $66,882, with a 44.80% increase in daily trading volume, currently valued at $43.80 billion. However, Bitcoin’s price has been generally unimpressive lately, down 1.33% and 6.20% over the past seven and thirty days, respectively.
Bitcoin trading at $66,499.00 on the daily chart | Source: BTCUSDT chart on Tradingview.com
Featured image from The Independent, chart from Tradingview
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