Liquidations Hit Bulls Amidst Bitcoin and Altcoins Drop, Why is the Market Down?

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Liquidations Hit Bulls Amidst Bitcoin and Altcoins Drop, Why is the Market Down?

Last updated on May 18th, 2024 at 12:47 pm

Market slam before the Bitcoin halving ends up in $400 million-sized liquidations for long positions. Major cryptocurrencies slumped in the past 24 hours following Bitcoin’s (BTC) trend reversal amid selling pressure. 

Data shows that Bitcoin (BTC) fell by 5%, moving to the $65,000 price range. The dip reflected on other major tokens, dumping Ether (ETH) by over 5% and Solana (SOL) by 7% while targeting other leading altcoins.

Liquidations Hit Bulls Amidst Bitcoin and Altcoins Drop

BTC/USDT 4h chart. Source: WhiteBIT Trading View

Meanwhile, Dogecoin (DOGE) dropped by more than 8%, and Shiba Inu’s SHIB decreased by over 7%. The slam evoked longs and bets on higher prices to take on more than $400 million in liquidations, while short positions liquidated for a relatively smaller $85 million.

cryptocurrency liquidation chart

Total liquidations chart. Source: Coinglass

Blame the Halving, or Something Else?

AMBCrypto cites that the recent market slump was marked by a weak start to the week for Bitcoin spot exchange-traded funds (ETFs). Soso Value data indicates that ten new investment avenues, tracking spot BTC prices, witnessed net outflows of $85 million on April 1.


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spot bitcoin etf inflows

Total Bitcoin spot ETF inflow. Source: SoSo Value

While the market was extremely volatile before Bitcoin halving, the first cryptocurrency was primarily affected by stronger-than-expected U.S. manufacturing sector data, as reported by Shivam Thakral, CEO at BuyUcoin, exclusively to AMBCrypto. 

On April 1, Manufacturing Purchasing Manager Index (PMI) data in the United States showed that manufacturing activity sharply expanded after 16 consecutive months of contraction.

Liquidations Hit Bulls Amidst Bitcoin and Altcoins Drop

US ISM Manufacturing PMI. Source: YCharts

“The Manufacturing PMI registered 50.3 percent in March, up 2.5 percentage points from the 47.8 percent recorded in February,” stated Timothy R. Fiore, the Institute for Supply Management (ISM) Manufacturing Business Survey Committee Chair. “The overall economy continued to expand for the 47th month after one month of contraction in April 2020. The United States manufacturing sector moved into expansion for the first time since September 2022. Demand was positive, output strengthened, and inputs remained accommodative.”

Following the update, the U.S. dollar strengthened, pushing commodities incl. Bitcoin and cryptocurrencies lower. 

Notably, the Manufacturing PMI Performance might push the US Central Bank to halt interest rate cuts in 2024, as per Bloomberg

The lower likelihood of the U.S. Federal Reserve cutting interest rates extrapolated on all risk-based markets, including the crypto one. Thus, Fed officials, including Christopher Waller and Raphael Bostic, have indicated a potential delay in rate cuts due to disappointing inflation data, with only a single rate cut likely in 2024. 


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Apart from the crypto market, the inflation factor impacted the S&P 500 and Nasdaq Composite which also slipped lower on this development. 

In an exclusive message to CoinDesk, FxPro senior market analyst Alex Kuptsikevich stressed the tendency:

“Bitcoin’s fourth attempt to consolidate above $71K this week was unsuccessful. The Nasdaq100 also showed some downward bias, indicating a cautious attitude toward risky assets, although the S&P 500 closed at another high. Bitcoin has thus found strong resistance, and the $69.5K and $68.5K levels attract our increased attention”

While Bitcoin is currently maintaining the support range just as most altcoins do, the market is remaining in the Greed zone. This could accelerate the prices in the market, pushing crypto further north.

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I am a crypto-enthusiast with 5-year experience in copywriting. Worked for web3 companies and cryptocurrency exchange, which drove my keen interest towards the industry. Been writing for different publications on cryptocurrency, technology, economics and politics.