The already volatile crypto market faced a significant downturn today leaving investors and market analysts wondering what could be the possible reason behind this dip leaving investors and enthusiasts pondering the underlying causes behind the sudden dip.
With Bitcoin being the leading cryptocurrency having surged over $73000, it faced a notable drop from its all-time high.
Unveiling the Top Reasons for the Market Plunge
Liquidation Issues
The first reason that could be the probable reason is the liquidation issues. The crypto landscape was rattled by substantial liquidation issues, with Bitcoin, Ethereum, and Solana bearing the brunt.
Coinglass data unveiled that $246.66 million worth of Bitcoins were liquidated and long-term traders fueled over $666 million worth of crypto liquidations. A notable liquidation was the significant $13.3 million sell-off on the OKX-BTC-USDT-SWAP platform.
Balancing the Crypto Market
Following the two weeks of crypto market surge with Bitcoin, dogwifhat (WIF) and other altcoins rising significantly and setting new records, presently the crypto market has experienced a ‘natural correction.’ Analysts like Captain Faibik foresee this correction as a precursor to Bitcoin’s halving, predicting a temporary dip before aiming for another all-time high.
Panic Selling
The tremendous surge in the crypto market marked in the previous couple of weeks has led investors and traders to what is called ‘panic selling’ to gain maximum profits from the resurgence. Investors and traders are having FOMO of missing out on the profits at the highest and optimal prices.
Analyzing Bitcoin’s Plunge
Bitcoin, the leader of the crypto market, plunged, following the downfall of the broader crypto market.
It is believed that factors such as speculations regarding the U.S. Federal Reserve’s interest rate cuts, CPI data release, PPI data release, and the impending Bitcoin halving have commemoratively resulted in the sudden fall of Bitcoin’s price.
Bitcoin’s sudden fall resulted in the wiping out of over $100 million in Bitcoin long positions.
Amidst the market turbulence, analysts offer divergent perspectives on Bitcoin’s trajectory. While many analysts believe the sudden dip acted as a natural correction, stopping from forming a crypto bubble, the exact reasons remain unclear. However, speculations suggest that most analysts believe, the main reason is liquidation in order to gain profits.