Key reasons BTC just collapsed to $66K

Bitcoin, the main cryptocurrency, experienced a sharp downturn today, plummeting to a low of $66,013 on the Bitstamp exchange. This downturn followed six consecutive months of gains, matching a historical record set back in 2012. Presently, the leading digital asset is trading at $66,761, marking a decline of over 4%. One of the major contributing factors to this bearish trend appears to be the outflows from Bitcoin ETFs.

On April 1st, Grayscale’s GBTC witnessed outflows totaling $302 million, surpassing expectations, as noted by prominent ETF analyst James Seyffart. Across the board, Bitcoin ETFs recorded a net outflow of $85.7 million on Monday, with products from BlackRock and Fidelity failing to counterbalance the losses incurred by GBTC.

In addition to the diminishing demand for Bitcoin ETFs, the cryptocurrency market has likely been impacted by bond traders adjusting their expectations regarding Federal Reserve rate cuts. The probability of a rate cut in June has fallen below 50%, adding pressure on risk assets like Bitcoin, which typically thrive under looser monetary policies. Last week, remarks from Federal Reserve official Christopher Waller hinted at a potential delay in rate cuts due to disappointing inflation data. Moreover, only a minority of Federal Reserve officials are in favor of three rate cuts in 2024, according to a report by the Financial Times. Atlanta Federal Reserve Bank President Raphael Bostic recently suggested that only a single rate cut is probable this year.

According to data provided by CoinGlass, over $500 million worth of cryptocurrencies has been liquidated in the past 24 hours alone. Notably, the majority of these liquidations ($417 million) originated from long positions. This resulted in liquidations affecting more than 155,000 traders, with the largest single liquidation order reaching $7.48 million.

Source: u.today