Bitcoin Falls Below $66K, Leads to $483M in Crypto Liquidations

Bitcoin (BTC) fell 5% to $65,970 from $69,450 in less than 30 minutes in the early hours of April 2 UTC. This marks a 10.60% drop from its peak of $73,798 reached in mid-March. 

The price drop triggered a massive liquidation of over $483 million worth of leveraged crypto positions on centralized exchanges (CEXs) in the past 24 hours. According to data from Coinglass, more than $387 million in longs and $95 million in short positions have been liquidated. This widespread liquidation activity has affected 151,131 traders. Most liquidations happened on Binance and OKX, with $226 million and $158 million, respectively.

Bitcoin recorded liquidations totaling $144 million, with $102 million from long positions and $42 million from short positions. The second-largest crypto, Ethereum (ETH), also experienced a 6.67% downturn over the past day — now trading at $3,299. ETH saw liquidations amounting to $108 million, comprising $83 million from long positions and $25 million from short positions.

Solana’s SOL fell 8.62% to trade at $179 after briefly touching $200 on Monday, while Dogecoin (DOGE) dropped over 11%. Dogecoin and Solana saw the liquidation of $16 million and $15, respectively, in the past 24 hours.

Key Reasons Why Bitcoin Just Collapsed to $66K

Bitcoin ETF outflows once again seem to be a major bearish factor. On April 1, Bitcoin ETFs posted a net outflow of $86.7 million, breaking a four-day positive inflow streak, according to the FarSide data. BlackRock’s IBIT stood as the top-performing fund, whose net inflows hit $165.9 million, while Fidelity’s FBTC came in second with $44 million. However, Grayscale’s GBTC saw $302 million in outflows. The sum is “higher than expected,” according to Bloomberg Intelligence ETF analyst James Seyffart.

Lolz. Its actually a $302.6 mln outflow for GBTC today — honestly higher than i expected. Thought this was have slowed down by now. https://t.co/uFXDrjrWg0

— James Seyffart (@JSeyff) April 1, 2024

In addition to the declining demand for Bitcoin ETFs, bond traders expecting fewer Federal Reserve rate cuts have probably affected the price of BTC. In fact, the likelihood of a rate cut in June has fallen below 50%. This, of course, is putting significant pressure on risk assets like BTC that typically benefit from looser monetary policy. Last week, a Federal Reserve official named Christopher Waller mentioned that rate cuts could be delayed because of disappointing inflation data. Only a few Fed officials favor implementing three rate cuts in 2024.