Last updated on May 18th, 2024 at 12:54 pm
After a rally reaching a new yearly high of above $44,000 last week, a significant Bitcoin price drop has been recorded today, declining by nearly 6% over the last 24 hours.
Bitcoin had a big jump early last week, moving close to $45,000 throughout the week. The surge in price excited investors as the bulls took over the market and the bullish momentum reflected across the market impacting most altcoins.
However, the excitement has been shortlived as the flagship cryptocurrency has shed over $4,000 in less than 24 hours. This has led to curiosity and the resounding question “Why is Bitcoin price down today”?
Over the past day, positions holding more than $100 million in Bitcoin were liquidated, according to Coinglass data. Furthermore, liquidations of approximately $80 million worth of Ethereum (ETH) brought the total amount of cryptocurrencies liquidated above $300 million in the last 24 hours.
Consequently, other cryptocurrencies are also suffering from the price drop. At press time, the price of Ethereum – the second-largest cryptocurrency by market cap, is down by 7.7%. In addition, top altcoins like BNB, Ripple (XRP), Solana (SOL), and Cardano (ADA) are down by 0.26%, 7.8%, 5.70%, and 12.24% respectively.
So, why is the Bitcoin price declining today?
Why Did Bitcoin Price Drop Today?
Bitcoin price dropped on Monday, December 11 as traders were increasingly worried that interest rates might not be cut by the Fed in 2024. Speculations have been going around for weeks suggesting that the price hike cycle of the past couple of years may be coming to an end.
It is important to know that the Bitcoin price surge of last week was fueled by two main reasons. First was the anticipation of a spot Bitcoin ETF approval by the Securities and Exchange Commission in January 2024, and the second was the possibility that the Fed might lower interest rates next year which in turn could pump more liquidity into the crypto market.
A healthy labor market can contribute to inflation, prompting the Fed to either maintain or raise interest rates to put inflation back in line with the Fed’s 2% target level.
Higher interest rates reduce the availability of money, which can harm the performance of speculative assets like Bitcoin and other cryptocurrencies.
Another reason why the price of Bitcoin is down today is a result of miners dumping some Bitcoin and extremely overbought conditions. According to data from CryptoQuant – a crypto wallet tracker, there has been a substantial decline in miner’s Bitcoin holdings.
Bitcoin miners’ reserves and netflows chart. Source: CryptoQuant
This is in line with miners sending more Bitcoin to cryptocurrency exchanges, which suggests they plan to sell or have already done so. It may seem that miners are already beginning to take profit ahead of the 2024 Bitcoin halving event which is supposed to reduce their rewards by half.
Bitcoin (BTC) price today
According to live data from Coinstats, Bitcoin is currently changing hands at $41,027. What is more, Bitcoin has a 24-hour trading volume of $57,348,907,229 ($57 billion) and a live market cap of $802,781,161,145 ($802.7 billion).
Read more:
- The Next Bitcoin Halving: Top 8 Facts You Need to Know
- Bitcoin Is Surging to $44K, Hinting Greed on ETF
- FUD Around WhiteBIT: Analyzing the Blacklist Case, Investigating Claims
