- Bitcoin rebounded from a major dip, instilling investor confidence, noted an analyst.
- Post-Halving, strong ETF demand may push Bitcoin’s price beyond $150,000,” predicted an expert.
The crypto market recently underwent a tumultuous phase, marked by an intense selling pressure that saw Bitcoin’s value plummet to a startling low of $61,000. This significant drop triggered a cascade of liquidations across the market, amounting to more than $1 billion.
Despite this, Bitcoin managed to regain its footing, sparking a sense of relief and optimism among investors.
Bitcoin just corrected from over $69,000 back to just under $65,000. This is very healthy price action. As I said before, this is the easy part of the cycle. Every dip should be bought. It has been wonderful sharing this journey with you and I’ll see you all in 2025. Ciao.
— Mike Alfred (@mikealfred) March 5, 2024
Unpacking the $1 Billion Liquidation
According to data from Coinglass, the market experienced a staggering $1.17 billion in liquidations over a 24-hour period. This comprised $876 million from long positions and $292 million from shorts.
This liquidation spree followed closely on the heels of Bitcoin’s brief resurgence, where it narrowly reclaimed its all-time high of $69,200 before the market took a downturn.
Several factors contributed to the initial selling pressure, including profit-taking at historical highs and Bitcoin miners offloading part of their holdings. Despite this, the market showed signs of recovery, buoyed by a resurgence in buying demand and a reset in funding rates for perpetual contracts.
This rebound was further supported by strong inflows into spot Bitcoin exchange-traded funds (ETFs), with BlackRock notably amassing over $760 million in a single day. To explore more details about this development, you can watch the following YouTube video.
Cause for Concern?
Despite Bitcoin’s remarkable recovery from a substantial drop, the significant liquidations exceeding $1 billion raise questions about market stability and investor sentiment. While the swift rebound highlights Bitcoin’s resilience, the large-scale sell-offs and the potential impact of miners offloading holdings could introduce volatility.
However, the upcoming halving event and sustained interest from ETFs offer a counterbalance, suggesting that while caution is warranted, there remains strong underlying support for Bitcoin’s value in the longer term, echoing earlier coverage by ETHNews.
BTC On-Chain Data Insights and Market Predictions
On-chain data provided by CryptoQuant revealed significant movements in the market just before the dip. Notably, 1,000 Bitcoins, valued at approximately $69 million and linked to miners, were transferred to Coinbase, indicating potential sell-off intentions.
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Such large transactions are known to have a considerable impact on the market, especially in conditions ripe for a sell-off.
Despite the market’s volatility, analysts remain bullish on Bitcoin’s future, especially with the anticipated Halving event in April. This event is expected to reduce mining rewards by half, potentially leading to increased scarcity and higher demand for Bitcoin.
And responding to the previous recent correction in BTC, renowned crypto researcher Alex Thorn saw it as a healthy price action, as it was similar to previous history that prepared the main cryptocurrency to shoot up to form a new ATH.
remember that in dec. 2020, BTC touched its prior all-time high of ~$20k twice, then ranged and traded -11.3% lower over 15 days before definitively breaking ATH
likely to look similar here, and some consolidation would be healthy after +62% YTD / +77% from YTD low (jan 23) pic.twitter.com/mkywLKn4FC
— Alex Thorn (@intangiblecoins) March 5, 2024
Some experts, like Alex Adelman, CEO of bitcoin rewards application Lolli, predict that Bitcoin’s price could surge beyond $150,000 in the year following the halving, driven by strong demand from both retail and institutional investors.
At the time of writing, the price of BTC has rose 1.17% in the last 24 hours, reaching a price of $67,482.01. This represents an increase of 14.44% over the past 7 days.