Bitcoin Price : Here’s Why BTC Price Falling?

Bitcoin has been facing a turbulent period recently, with prices experiencing significant fluctuations. Its price soars to $70,000 or higher one day and nearly reaches $60,000 the next. There are many developments happening with the coin, as it navigates through a market crash but is still anticipated to satisfy the hopes of investors and fans by rising in price after the upcoming Bitcoin halving. The focus of this article is to discover why Bitcoin price is dropping, regardless of whether this trend will change in the future or not.

Current Bitcoin Price Market Performance

Bitcoin price has been trading from a low of $62,332.07 to a high of $66,878.65 in the past 24 hours, settling at $63,000 today. The leading cryptocurrency witnessed a decline in its value by 4.52% in the past day, and 11.33% over the past week. As a result, BTC market cap has dropped by 4,47% to stand at approximately $1.24 trillion. Regardless of the dip, the coin still maintains its position as the leading cryptocurrency, according to CoinMarketCap. 

The  trading volume of Bitcoin has also witnessed a 6.37% to settle at around $45.16 billion. The market is experiencing moderate trading activity relative to the overall market size, as indicated by the volume-to-market cap ratio of 3.49%.

Top Reasons Why Bitcoin Price is Falling

Various factors have contributed to the drop of BTC prices as discussed next.

1. Geopolitical Conflicts

One of the main reasons for the dropping of BTC price is recent increased tensions in the Middle East, after Israel was attacked by Iran. The value of Bitcoin fell by over  8.4% from $67,000 to the current price of approximately $62,000. This decline resulted into a loss of over $130,000 million in market capitalization within a few minutes, spilling the effect over to other cryptocurrencies including Solana and Ethereum. The geopolitical uncertainty and risks in the region have caused investors to shift away from  riskier markets like cryptocurrencies, and seeking safe havens such as gold and the U.S dollar. U.S. President Biden has warned of possible further attacks, adding to concerns regarding a wider regional conflict. This has contributed to the uncertainty and volatility facing BTC and the global crypto market.

2. Normal Pre-halving Retracement

Another reason the price of BTC has nosedived is because the coin is in its normal pre-halving retracement phased. Normally, this takes place before Bitcoin halving occurs. Bitcoin’s retracing is consistent with past trends, a time which the value of Bitcoin fluctuated days before the halving event. 

The pre-halving drawdown typically begins around 18 days before the expected halving date, which is April 20. 

At this time, Bitcoin frequently experiences a temporary decrease in value, a common occurrence in its past trends. In the 2020 halving cycle, Bitcoin went through a 20% decrease in price before the halving event.

The retrace is essential in establishing the range low for the re-accumulation phase that follows the halving. This phase helps define the price levels that Bitcoin will trade within after the halving. In previous cycles, the pre-halving retrace set the stage for the re-accumulation range, with the range low typically being around $60,600.

Although historical data suggests that Bitcoin is likely to hold its current range low, crypto trade and analyst, Rekt Capital, asserts that there is potential for unexpected price volatility below this range. Such fluctuations may provide investors with opportunities for bargain-buying in preparation for the post-halving period and the subsequent parabolic upside phase.

According to the analyst, the pre-halving retrace and re-accumulation range are interconnected, representing one larger opportunity for investors to position themselves before the parabolic upside phase that typically occurs months after the halving.

3. Liquidations of Long Positions

The decrease in Bitcoin value was partially due to the closure of long positions in the Bitcoin futures market. Market witnessed high volatility in conjunction with liquidations, indicating a significant market movement. In one day, more than $43.7 million worth of long positions were closed, with a sudden increase to $20.6 million within a span of only 4 hours, according to Coinglass. Due to decreased purchasing activity, Bitcoin trading volumes dropped by more than $24 billion from the peak of $45 billion on March 5.

4. Bitcoin ETFs Outflows

There has been a recent observation of outflows from U.S. Bitcoin ETFs, except for BlackRock’s BTC ticker ETF which saw inflows in the past two days. According to Farside Investors data, iShares Bitcoin Trust (IBIT) had net inflows of $73.4 million on April 15, but this was overshadowed by outflows from the Grayscale Bitcoin Trust (GBTC). All 10 spot Bitcoin ETFs experienced net outflows on April 14 and 15 totaling $55.1 million and $36.7 million respectively. Global Bitcoin investment products also saw outflows, indicating investor hesitancy and contributing to downward pressure on Bitcoin’s price.Overall, the cryptocurrency market is experiencing fluctuations, with investors showing caution in their decision-making.

Conclusion

The drop in Bitcoin’s price can be attributed to a mix of geopolitical tensions, market adjustments, closing of long positions, and withdrawals from Bitcoin ETFs. Although these factors might create short-term uncertainty, Bitcoin’s outlook in the long run is optimistic as the market adapts to these challenges. Investors need to remain knowledgeable and be cautious when operating in the unpredictable realm of cryptocurrencies.

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