The price of Bitcoin, the largest cryptocurrency by market cap, has been constantly dropping for over a week now. BTC slumped to $61k on March 20, 2024, signifying its lowest price level since March 5.
The steady dip has caused a major panic across the crypto market particularly among beginners who are not very familiar with the level of volatility in the crypto market. However, experienced investors see this as an opportunity to get into the market at a discounted price.
What’s behind the Bitcoin price drop?
In a significant turn of events, Bitcoin has dropped to its lowest level in over two weeks after witnessing a surge in liquidation for Bitcoin features contracts according to data from The Block. The slide to the $61,000 level has triggered liquidations of over $440 million for crypto future traders who bet on higher prices.
BTC has fallen by 3% in the last 24 hours and by a significant 14% over the last week. The price of the asset has corrected lower since it reached its all-time high of almost $74k last week.
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There is no major reason for the selloff, however, several factors can be attributed to it. Bitcoin price is known to be very volatile and traders are more likely to take profit after a significant surge which can cause a notable price turn.
Additionally, there has been a notable increase in trading activity for Bitcoin due to the inflow of institutional funds into the cryptocurrency market by spot bitcoin exchange-traded funds (ETFs). According to Yahoo Finance data, daily dollar-value bitcoin volumes have recorded their tenth greatest values in just the previous three weeks.
Finally, the surge in liquidations for Bitcoin features can also be a factor behind the price slump. Liquidation occurs when crypto exchanges force traders to close leveraged positions which leads to a total or partial loss of their initial margin.
Bitcoin price could drop as low as $55k in coming weeks
Meanwhile, some experienced analysts have predicted the price of Bitcoin falling further to the $55,000 level in the coming weeks even though they stress that the bullish outlook remains positive.
The crypto fear and greed index today rests at 74 points which still signifies ‘greed’ according to Alternative data. However, it represents a 5-point drop from yesterday’s ‘extreme greed’ at 79.
Other tokens have also suffered major losses following this. Ethereum, the second-largest cryptocurrency has dropped by 4% in the last 24 hours, currently selling at $3,200. Solana (SOL), Avalanche (AVAX), and Cardano (ADA) have also witnessed significant losses.
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At the time of writing, Bitcoin is changing hands at $62,808 according to Coinstats data with a 24-hour trading volume of $71.3 billion.
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Victor Swaezy
Victor Nnamdi Igbor "Swaezy" is a crypto enthusiast and writer with over 8 experience in blogging. He is an easy person and when not working, loves to have a good time.