The cryptocurrency market has undergone a sharp correction, with the global cryptocurrency market capitalization falling by more than 8% to an all-time low of $2.38 trillion. The recent decline has wiped out more than $250 billion in market value across the cryptocurrency market.
Bitcoin price fell from $70,978 to $65,2540 due to various reasons including option expiry, historic Bitcoin halving pattern, macroeconomic factors, and weakness on technical charts. Bitcoin caused a decline in the cryptocurrency market, with Ethereum prices falling by 12%. As a result, altcoins SOL, XRP, ADA, DOGE, SHIB, etc. fell by 15-30%. Memecoin is one of the most liquid cryptocurrencies in the past 24 hours.
Crypto market decline started due to option expiration, exacerbated by other factors
Cryptocurrency markets really started to show signs of weakness ahead of the US CPI data earlier this week. According to a report, the rise in Bitcoin price to $72,000 was a range move in response to increased Bitcoin ETF inflows and long position demand due to FOMO surrounding the Bitcoin halving. coin gape.
experts such as benjamin cowen, peter brandt, and Arthur Hayes predicted a decline, possibly a market crash, if BTC prices repeat chart patterns similar to those seen during previous Bitcoin halving events and the recent Spot Bitcoin ETF listing. Cowen predicted that BTC price could fall below $60,000 after the halving.
coin gape He also predicted that the prices of BTC and ETH would fall after the options expire. As clearly shown in the chart above, the cryptocurrency market decline began with option expiration at 12:00 PM UTC. The reasons for this include the maximum pain point being lower than the transaction price, the predominance of sell transactions in the derivatives market with low trading volume, and sluggish market conditions due to the rise in CPI.
BTC price broke through key support levels of $70,400 and $68,200, with the decline further exacerbated by geopolitical tensions in the Middle East and negative sentiment following major banks' earnings releases. JPMorgan Chase stock fell 6.47% on Friday.
caused by global macroeconomic events us dollar index (DXY) rose above 106, its highest since early November. US 10-year Treasury yield The index rose to a six-month high of 4.585%. With Bitcoin moving inversely to DXY and U.S. Treasury yields, the rise in both prices caused the price of Bitcoin to fall to $65,000, causing a crash in the crypto market.
Cryptocurrency price correction is not over yet
coin glass According to data, more than $950 million was liquidated across the crypto market during this strong correction. Of this, $830 million of long positions were liquidated and nearly $120 million of short positions were liquidated in the past 24 hours.
Over 297,000 traders were liquidated, and the largest single liquidation order occurred on cryptocurrency exchange OKX, where someone exchanged ETH for $7.19 million worth of USD.
QCP Capital Although we remain structurally bullish, we believe the deleveraging decline could become even more severe, especially given the extent of this year's bull market. This suggests that traders looking to hedge against short-term downside should consider the BTC price at expiration on May 31st.
Markus ThielenCEO of 10x Research, said Bitcoin miners could sell $5 billion of Bitcoin after the halving event, with whales leading the decline.
BTC price is currently trading at $67,211 and will remain under selling pressure if the price remains below support and fails to break above the 20 simple moving average. ETH price is trading at $3,252 at the time of writing.
Also read: GBTC outflows surge past $16 billion, contradicting CEO's 'balanced' comment
