The crypto market experienced an unexpected hit on April 12, with a sudden decline in the prices of Bitcoin and various altcoins leading to significant liquidations. Reports indicate that Bitcoin slipped by 4.49% in the last day, dropping to as low as $66,052. This decline had a ripple effect across the market, with major altcoins like Ethereum and Solana also recording daily losses of 8.12% and 12.16%, respectively. The total liquidations in the past 24 hours amounted to a staggering $877.21 million, resulting in the closure of 277,843 leverage positions. Interestingly, long positions accounted for the majority of losses at $782.98 million, while short traders lost $94.24 million.
Correlation with US Stock Market
The price decline in Bitcoin coincided with a dip in the US stock market, particularly the S&P 500 index, which fell by 1.6% to trade as low as $5,108. This market crash followed the release of recent CPI data, indicating a rise in the inflation rate to 3.5% year over year in March. These developments suggest that the US Federal Reserve (Fed) may not implement any rate cuts in the near future, aiming to bring inflation down to its target of 2%. Such a bearish prediction for the crypto market is a result of Fed rate cuts typically prompting investors to seek riskier assets like BTC.
Positive Outlook and Halving Event
Despite the recent market fluctuations, there are positive indicators for Bitcoin’s future. There has been an increase in non-empty wallets on the Bitcoin network ahead of the upcoming Halving event on April 19. Blockchain analytics platform Santiment reported a rise of 370,000 BTC wallets holding active coins in the past six days. Analysts are optimistic that investors will continue accumulating Bitcoin leading up to the Halving event. Currently, Bitcoin is trading at $66,882, with a notable 44.80% surge in daily trading volume, reaching $43.80 billion. However, Bitcoin’s price performance has been lackluster in recent weeks, with declines of 1.33% and 6.20% in the last seven and 30 days, respectively.
The recent fluctuations in the crypto market, particularly the decline in Bitcoin and altcoin prices, have raised concerns among investors. The market crash on April 12, coupled with liquidations totaling $877.21 million, has highlighted the volatility and unpredictability of the cryptocurrency space. Factors such as the correlation with the US stock market and the upcoming Halving event have added complexity to the market dynamics. Investors are advised to conduct thorough research and carefully evaluate their investment decisions in light of these developments. While there are positive indicators for Bitcoin’s future, the current market landscape remains uncertain and requires caution.