The crypto market faced an unexpected downturn on April 12, as the prices of Bitcoin and other major altcoins experienced a sharp decline. The exact cause of this sudden drop remains uncertain, with various theories circulating, including a possible correction in the US stock markets. According to data from CoinMarketCap, Bitcoin saw a decrease of 4.49% in just one day, plummeting to as low as $66,052. This drop in Bitcoin’s price had a ripple effect across the market, leading to significant losses for other prominent altcoins such as Ethereum and Solana, which recorded daily losses of 8.12% and 12.16%, respectively.
The market turbulence translated into a staggering number of traders losing their leveraged positions, with a total of 277,843 traders experiencing liquidations amounting to $877.21 million in the span of 24 hours, as reported by Coinglass. Long positions accounted for the majority of the losses at $782.98 million, while short traders suffered losses amounting to $94.24 million. Within just one hour, $467 million worth of leveraged positions were closed due to the general decline in prices. The largest chunk of liquidations, totaling $369.85 million, occurred on Binance, with the largest individual liquidation order valued at $7.19 million taking place in the ETH-USD market on the OKX exchange.
Interestingly, Bitcoin’s price decline seemed to align with a downturn in the US stock market, as evidenced by the 1.6% drop in the S&P 500 index, which fell to $5,108. This market turmoil followed the release of recent CPI data indicating a rise in the inflation rate to 3.5% year over year in March. These developments suggest that the US Federal Reserve (Fed) may delay any rate cuts in an effort to curb inflation and bring it down to the targeted annual rate of 2%. Such a scenario could have bearish implications for the crypto market, as Fed rate cuts typically encourage investors to seek out riskier assets like Bitcoin in search of higher returns.
Despite the market challenges and uncertainties, Bitcoin has seen a rise in the number of non-empty wallets on its network leading up to the upcoming Halving event on April 19. Blockchain analytics platform Santiment reported a significant increase of 370,000 BTC wallets holding active coins over the past six days. This uptrend in wallet activity has bolstered investor confidence, with the analytics team expressing optimism that this trend will persist throughout the Halving event. At the time of writing, Bitcoin was trading at $66,882, with a notable 44.80% surge in daily trading volume, reaching $43.80 billion. However, Bitcoin’s price performance has been lackluster in recent weeks, with declines of 1.33% and 6.20% over the past seven and 30 days, respectively.
The crypto market remains highly volatile and subject to sudden fluctuations in prices, influenced by a myriad of factors including global economic trends and policy decisions. While recent setbacks have caused notable losses for traders and investors, there are also signs of resilience and optimism within the market. As the landscape continues to evolve, it is crucial for participants to stay informed, exercise caution, and conduct thorough research before making any investment decisions. The future of the crypto market remains unpredictable, underscoring the importance of adaptive strategies and risk management practices for navigating its challenges effectively.
