Here Are The 4 Key Reasons Why Bitcoin, ETH, BNB XRP, Doge Price Crash 

The post Here Are The 4 Key Reasons Why Bitcoin, ETH, BNB XRP, Doge Price Crash  appeared first on Coinpedia Fintech News

Bitcoin, the leading cryptocurrency by market capitalization, took a sharp drop to $66,690 in a single day, dragging its market cap down to $1.30 trillion, while its trading volume spiked to $78.6 billion.

At the same time, the global cryptocurrency market cap witnessed a sharp decline of over 7% to $2.55 trillion. Ethereum (ETH) suffered the most, losing over 9% of its value, along with other popular cryptocurrencies like BNB, XRP, and Litecoin (LTC). Even the fun and trendy meme coins like Dogecoin (DOGE) and Shiba Inu (SHIB) saw a huge drop of over 14%.

Delay in US Fed Rate Cuts 

One of the primary reasons behind today’s drop is due to a higher fed rate cut. According to US Federal Reserve Chair Jerome Powell’s recent testimony to Congress, the possibility of US Fed rate cuts hinges largely on new economic data, including inflation and job figures. 

Despite earlier expectations, indications of higher inflation and a recovery of the US economy suggest that rate cuts may be delayed until the end of the year. This uncertainty has led to market volatility, with the US dollar index rising and global stock markets faltering.

Additionally, data from the CME FedWatch now suggests a 54% probability of a 25-bps rate cut in June and 47% odds of a similar cut in July.

Options Expiry On Friday

Friday’s Options Expiry fueled up the crypto market, with over $3 billion in Bitcoin and Ethereum options expiring on March 15th. Among them, 30,568 BTC options, valued at $2.09 billion, were set to expire, with a maximum pain point of $66,000. 

Despite BTC briefly dropping to $66,770, it maintained a position above the maximum pain threshold, indicating potential opportunities for buyers amidst the dip. 

Similarly, the expiration of 332,094 ETH options, valued at $1.24 billion, saw traders maintain a bullish stance, despite the maximum pain point resting at $3,550. Currently, ETH trades at $3,748, having bounced back from a 24-hour low of $3,681.

Drop-In Bitcoin ETF Inflow

Meanwhile, the U.S. Spot Bitcoin ETF sector witnessed a significant decline in inflows, dropping by 80.6% to $133 million on Thursday. This decline, the lowest observed over the past eight trading days, aligns with a downturn in Wall Street sentiment amid recent economic data.

In response, investors withdrew holdings from Grayscale’s GBTC, potentially influenced by market indicators like the pre-halving market peak and declines in gold and equity markets. GBTC recorded an outflow of $257.1 million on Thursday, further underscoring the prevailing market sentiment.

$821M Crypto Holdings Liquidated

The recent liquidity flush in the crypto market resulted in a staggering loss of over $821 million in market value, as earlier reported by Coinpedia. However, more than 247.8K traders liquidated their positions within 24 hours. The largest single liquidation order involved a BTC-USDT swap valued at $13.30 million on the OKX exchange.

During this period, Bitcoin and Ethereum saw significant liquidations, totaling over $279 million and $137 million, respectively. This caused the overall crypto market to suffer losses, but some analysts see it as a potential opportunity to buy at a lower price.