Cryptocurrency markets took an unexpected hit on April 12 with a spontaneous drop in the price of Bitcoin and major liquidations in major altcoins. Among numerous plausible reasons, including the recent price correction in the U.S. stock market, the cause of this widespread price decline is largely unknown.
A cryptocurrency flash crash liquidated nearly $500 million in one hour.
Bitcoin fell 4.49% on the last day, falling to $66,052, according to data from CoinMarketCap. As expected, BTC’s decline reverberated throughout the market, with major altcoins Ethereum and Solana recording daily losses of 8.12% and 12.16%, respectively.
As previously mentioned, these losses resulted in 277,843 traders losing their leveraged positions, as total cryptocurrency liquidations reached $877.21 million in the last 24 hours, based on data from Coinglass. Of this figure, long positions accounted for $782.98 million, while short traders accounted for only $94.24 million.
Notably, the overall price decline resulted in a $467 million leveraged position being closed in less than an hour. The highest liquidation amount was recorded on Binance at $369.85 million, while the single largest liquidation order was recorded at $7.19 million on the ETH-USD market on the OKX exchange.
Source: CoinglassInterestingly, the decline in Bitcoin prices was correlated with declines in the US stock market, with the S&P 500 index falling 1.6% to $5,108. The market crash was triggered by the latest CPI data, which showed the inflation rate rose 3.5% in March compared to the same period last year.
These reports only indicate that the US Federal Reserve (Fed) may not be able to cut interest rates as soon as it sets its sights on lowering inflation to its annual target of 2%. These forecasts are quite bearish for the cryptocurrency market in general, as the Fed’s interest rate cuts have made investors comfortable looking to riskier assets like BTC with potentially higher returns.
Bitcoin experiences network growth as halving approaches.
On a more positive note, Bitcoin has recorded an increase in non-empty wallets on the network ahead of its April 19 halving event. Blockchain analytics platform Santiment reported that the number of BTC wallets holding active coins has increased by 370,000 over the past six days. Interestingly, the analyst team is supporting investors in maintaining this cumulative trend throughout the Bitcoin halving event.
At the time of this writing, Bitcoin is trading at $66,882, with a daily volume increase of 44.80%, and is now worth $43.8 billion. However, the Bitcoin price has generally been unimpressive, falling 1.33% and 6.20% over the past 7 and 30 days, respectively.
Bitcoin trading at $66,499.00 on the daily chart | Source: BTCUSDT chart on Tradingview.com
Featured image from The Independent, chart from Tradingview
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