As reported by Fortune magazine, the cryptocurrency market has been experiencing significant volatility as Bitcoin (BTC) has suffered a sharp decline that has had a domino impact on other cryptocurrencies. The recent drop in Bitcoin’s price, coupled with Grayscale’s GBTC exits, has raised concerns among investors.
Bitcoin sees 14% correction from ATH
Bitcoin has suffered a 14% drop since reaching its all time high (ATH) of $73,700 last week, briefly reaching $62,483 on Tuesday morning. However, it recovered and stabilized around $64,900, just below the $65,000 mark.
The decline was attributed to record outflows of more than $640 million from Grayscale’s Bitcoin Trust (GBTC). By comparison, other spot Bitcoin ETFs saw inflows of less than $500 million, resulting in a net outflow of $15 million on Monday. according to to Bloomberg ETF expert James Seyffart.
![Record-Breaking GBTC Outflows Send Bitcoin 14% to $62,000 1 Bitcoin](https://thegurumedia.com/wp-content/uploads/2024/03/GJAciI_XcAApiWN.png)
That outflow of GBTC, combined with cautious sentiment surrounding the US Federal Open Market Committee (FOMC) meeting, had a significant impact on Bitcoin’s performance.
How recently reported per NewsBTC, investors demonstrated caution ahead of the FOMC meeting, closely monitoring potential changes in interest rates. Recent higher-than-expected inflation data, as indicated by the US Consumer Price Index (CPI) and Producer Price Index (PPI), have dampened expectations of interest rate cuts.
According to Fortune, the CME FedWatch tool projected a 99% probability of rates remaining unchanged, further affecting market sentiment. According to the report, investors were interested in assessing the Federal Reserve’s stance on monetary policy, contributing to the cautious trading environment.
In the same context, the Bank of Japan increased its policy interest rate from -0.1% to 0% to 0.1% in response to rising consumer prices. This was the first rate increase in 17 years.
Crypto Futures Traders Take a Hit
The drop in Bitcoin’s price had a ripple effect on other cryptocurrencies. Top altcoins like Ethereum (ETH) and Solana (SOL) experienced significant drops of 8.1% and 12.5% in the last 24 hours, respectively.
Meme coins, including Floki Inu (FLOKI), Bonk Inu (Bonk), and Dogecoin (DOGE), also suffered losses of 34%, 28.5%, and 24.8%, respectively, during the past week.
The decline in cryptocurrency prices has resulted in more than $440 million in settlements for crypto futures traders. Traders who had leveraged positions betting on higher prices faced significant losses. The majority of these liquidations occurred on Binance, totaling $212 million, followed by OKX with $170 million.
Despite the price correction, BTC retains substantial gains of over 26% and 132% over the past thirty days and year-to-date, respectively.
Featured image from Shutterstock, chart from TradingView.com
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