• 26 May, 2024
News

Bitcoin Plummets to Multi-Month Low as U.S. Demand Declines

Bitcoin (BTC) experienced a sharp decline, falling to a multi-month low as a result of a downturn in U.S.-based demand and broader market headwinds. The price of bitcoin dropped below the crucial $60,000 support level, hitting lows not seen since late February. 

The cryptocurrency’s market correction led to a surge in long liquidations, totaling $145 million in just 24 hours. Overall, the crypto market saw more than $463 million in liquidations during the same period, with the majority of $398 million coming from long positions.

By Wednesday morning, Bitcoin was trading at $57,161, marking an almost 8% drop in just one day. This sudden price correction has raised concerns among investors, with the total amount of liquidated bitcoin positions reaching $166 million. Ether (ETH), the second-largest cryptocurrency, also faced a 6.2% decline to $2,870 within the same timeframe.

CryptoQuant’s latest market report pointed to a slowdown in demand from ‘whale’ investors as a significant cause for the current correction. According to the report, the bitcoin balance of permanent holders and large ‘whale’ investors in the spot market saw slower growth, with a notable decline in the Coinbase premium indicating a reduced appetite from U.S. investors. This premium, which measures the difference in bitcoin prices between U.S. and overseas exchanges, dropped below zero, signaling lower demand.

10x Research, a digital asset research firm, suggested that further downside risks remain, predicting a potential drop to the $52,000 level based on outflows from U.S. spot exchange-traded funds (ETFs), which have totaled $540 million since the fourth Bitcoin halving. The firm’s CEO, Markus Thielen, indicated that this could lead to a correction of 25% to 29% from the recent peak of $73,000.

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