Bitcoin Plunges, Breaks Below $67K and $66K in 10 Minutes

On April 2nd, at approximately 10:35 AM Beijing time, Bitcoin experienced a significant sell-off, causing its price to rapidly decline. Within 10 minutes, Bitcoin fell below two key levels, $67,000 and $66,000, with losses exceeding 6%

On April 2nd, at approximately 10:35 AM Beijing time, Bitcoin experienced a significant sell-off, causing its price to rapidly decline. Within 10 minutes, Bitcoin fell below two key levels, $67,000 and $66,000, with losses exceeding 6%.

Market Impact:

The Bitcoin drop triggered a decline across other cryptocurrencies as well. Ethereum witnessed a 24-hour drop of over 7%, while Dogecoin plummeted by 11.3% in the same timeframe.

Liquidations:

According to CoinGlass data, there were 153,000 liquidations in the crypto market in the past 24 hours, with a total value of $474 million (approximately 3.4 billion RMB).

Reasons for Bitcoin's Decline:

Zhao Wei, a senior researcher at OKX Research Institute, believes that outflows from Bitcoin spot ETFs played a significant role in driving the price drop. Additionally, a surge in the US dollar index and a decline in the probability of a Fed rate cut in June added to the market uncertainty, cooling investor optimism.

Bitcoin's Volatility:

Recently, Bitcoin has exhibited extreme volatility, characterized by sharp upswings and downswings. For instance, on March 14th, Bitcoin soared above $73,000, setting new all-time highs for four consecutive days. However, by March 15th, it had plunged to $66,000, reaching a weekly low. Industry experts suggest that the break below $70,000 has amplified the market's volatility and risk premium, signaling the presence of some fear-driven selling.

Bitcoin Halving:

A major event for the crypto market, the Bitcoin "halving," is scheduled to occur this month. It refers to a roughly four-year cycle where the reward for mining new blocks is reduced by half. According to BTC.com, there are less than 20 days remaining until the next halving, which will occur when the block height reaches 840,000 in April. The block reward will then decrease from 6.25 Bitcoin to 3.125 Bitcoin.

Reasons for Investing in Bitcoin and Associated Risks:

Despite the risks, many investors continue to invest in Bitcoin for reasons such as its high return potential, diversification benefits, and potential as an inflation hedge. However, investing in Bitcoin carries significant risks, including large price swings, vulnerability to hacks, regulatory uncertainty, and market manipulation.

China's Regulation of Bitcoin:

In China, holding and trading Bitcoin is illegal. Relevant authorities have ordered the closure of domestic Bitcoin trading platforms, and the People's Bank of China has issued a notice stating that cryptocurrencies do not have the same legal status as fiat currencies and that related business activities are considered illegal financial activities.

Bitcoin's Future Trajectory:

Fluctuations in Bitcoin's price are an intrinsic part of its nature. Its future trajectory will depend on factors such as market sentiment, macroeconomic conditions, and regulatory developments. When making investment decisions, investors should carefully consider Bitcoin's place in the digital asset landscape and the intricate relationship between digital assets and the digital economy.

Disclaimer:

The information and data in this article are for reference only and do not constitute investment advice. Please verify the information before using it. Any actions taken based on this information are at your own risk.