Bitcoin and other cryptocurrencies tumbled on Tuesday as volatility skyrocketed ahead of the block subsidy halving event later this month. The plunge has seen traders with leveraged exposure to BTC and other cryptos rack up over $430 million in losses over the past 24 hours alone.
Bitcoin Plunges 5%
The crypto market is down today, with the global market cap contracting by 5.3% to $2.4 trillion on April 2.
Bitcoin, the crypto leader, has fallen 5% over the past 24 hours to $66,150 at press time, with BTC trading as low as around $65,970 in a recent trough. Bitcoin has plummeted since notching a new all-time high close to $74K in March, a peak roughly a week after the OG crypto blasted past its old all-time high in November 2021.
Ether (ETH), the industry’s second-largest crypto, has fared even worse than BTC. At publication time, the ETH price was hovering at $3,344. That’s a 6.1% drop since yesterday and 8.3% lower than it was this time last week.
Other altcoins were also weak, with Solana’s SOL down 7.8% and Cardano (ADA) shedding 7%. Meme coins were not spared, with Dogecoin (DOGE) dipping 10.3% and Shiba Inu (SHIB) plummeting 7.4%.
The crypto market drawdown means that a lot of long positions opened by optimistic traders have been liquidated, as per CoinGlass data. In the past day, around $344.01 million worth of long and $86.14 million worth of short positions have been liquidated across digital asset contracts. BTC alone saw more than $90 million in longs liquidated overnight.
Why Is Bitcoin Down Today
A factor injecting volatility into the Bitcoin market may be Grayscale’s continued sell-off. On April 1, Grayscale’s GBTC got rid of another $302.6 million in digital coins. According to Bloomberg Intelligence analyst James Seyffart, this figure is “higher than expected.”
Another possible factor? Bond traders have priced in fewer rate cuts by the Federal Reserve. Notably, the likelihood of the Fed delivering the first rate cut in June has now fallen below 50%. This is undoubtedly putting pressure on risk assets like Bitcoin that normally flourish amid looser monetary policies.
Bitcoin may remain volatile ahead of the blockchain’s fourth halving sometime this month. Although a parabolic BTC rally has ensued after previous halving events, discussion continues to rage over whether the forthcoming halving is already priced in.
