The cryptocurrency market experienced a sudden and sharp downturn on Friday, April 12, which saw the Bitcoin price and the value of other large-cap assets take severe hits. The price of Bitcoin, which has been mostly moving sideways over the past few days, fell below the $67,000 mark for the first time in more than a week.
As a result of the abrupt decline, the crypto market has witnessed nearly $900 million in liquidations in the past 24 hours. According to Futures market data from Coinglass, losses from leveraged Bitcoin and Ether positions are responsible for the larger chunk of the liquidations.
On-chain analytics firm Santiment has revealed the driving factor behind the latest decline in the Bitcoin price and the general crypto market downturn.
Here’s Why BTC Price Fell Below $67,000
The price of Bitcoin has dipped by about 5% in the past day, crashing from above $70,000 to below $67,000 within five hours. This is the premier cryptocurrency’s first decline below the $67,000 mark since April 4, according to blockchain intelligence firm Santiment.
The value of Ether, the second-largest cryptocurrency by market capitalization, witnessed an even steeper drop, falling by almost 8% in less than 24 hours. The performance of the two largest digital assets puts into perspective the current state of the crypto market.
Interestingly, the recent downturn in the crypto market prices has not been in isolation, as traditional assets have also been undergoing significant correction. Santiment revealed in its latest report that the S&P 500 index and gold prices also fell by 1.5% and 3.4%, respectively.
#Bitcoin's first drop below $67K since April 4th has been accompanied by over $850M in #liquidations the past day. #SP500 & #gold prices have also retraced alongside #crypto, suggesting #CPI and #inflation concerns are being revealed across sectors. https://t.co/hAs4oQFYLo pic.twitter.com/WDXrgNJ5sK
— Santiment (@santimentfeed) April 12, 2024
According to the on-chain analytics firm, the notable decline in prices across both the crypto asset and traditional asset sectors is tied to concerns around CPI and inflation. CPI, the Consumer Price Index, is a metric that measures inflation (or change in prices of goods and services) experienced by consumers.
The recent decline in the stock market and Bitcoin price appears to have resulted from continuous inflation, which has caused the Federal Reserve (Fed) to maintain higher interest rates. This persistently high inflation has led to doubts about the central bank lowering interest rates throughout 2024.
Indeed, Bitcoin and other assets like gold can serve as a hedge against inflation and economic uncertainty. However, raised interest rates tend to influence investors to move away from high-risk assets, such as cryptocurrencies, leading to a decrease in their prices.
Bitcoin Price Quick Look
As of this writing, the Bitcoin price stands at around $66,826, reflecting a significant 5% decline in the past 24 hours.
Featured image from iStock, chart from TradingView
