Traders Liquidate $115 Million Amid Halving Fears

• Bitcoin’s price dropped below $60,000, with a 3% decrease in 24 hours, triggering traders to sell off assets and liquidate positions, resulting in a significant drop in trading volumes.

• The impending Bitcoin halving event on April 20 has heightened market volatility as traders anticipate shifts in market dynamics.

Bitcoin witnessed a significant price drop below the $60,000 mark. This price decline comes just days before the highly anticipated halving event, causing traders to liquidate positions in the market. According to data from CNF Marketplace, Bitcoin has decreased by 3% in price over the past 24 hours, trading at $61,439 at the time of reporting. 

CoinGlass data revealed that traders are actively liquidating their positions, with over $115 million worth of assets being offloaded in just four hours. Most of these liquidations, amounting to $96.70 million, were long positions, while the remaining were short. Notably, the largest share of liquidations occurred on the OKX crypto exchange, totaling $43.81 million.

Impending Bitcoin Halving Sparks Volatility

 This decline occurred amid anticipation of the Bitcoin halving event expected on April 20. The looming event has contributed to increased volatility in the cryptocurrency market. With the halving set to reduce miner rewards by 50%, traders are bracing themselves for potential shifts in the market dynamics. Some Bitcoin supporters view the halving optimistically, as it will limit the number of coins entering the market. However, this anticipation has also led to uncertainty, prompting traders to adjust their positions accordingly.

Other factors have also influenced Bitcoin’s recent price movements besides the halving. Investors have been withdrawing funds from popular Bitcoin ETFs following comments from U.S. Federal Reserve Chairman Jerome Powell regarding inflation. Powell’s statement about the central bank’s stance on interest rates has added to the market’s uncertainty, leading to further sell-offs. Other factors include geopolitical tensions in the Middle East, weakening technical indicators, and stagnating demand for spot Bitcoin exchange-traded funds (ETFs).

Markus Thielen, head of research at 10x Research, observed a trend of crypto miners accumulating Bitcoins since January 2024 to create a supply-demand imbalance. This accumulation drove Bitcoin’s price to historical highs in March. However, Thielen also notes that digital asset mining companies are expected to gradually sell off accumulated coins post-halving, which could exert downward pressure on cryptocurrency prices.

ETF Outflows Exacerbate Sell-side Pressure

Data from Farside Investors revealed net outflows totaling $58 million from U.S. spot Bitcoin ETFs on April 16. Notably, the Grayscale Bitcoin Trust (GBTC) and ARK 21Shares Bitcoin ETF (ARKB) experienced outflows of $79.4 million and $12.9 million, respectively. Most ETF issuers recorded zero flows recently, sparking questions among market participants.

Bloomberg ETF analyst James Seyffart addressed concerns, explaining that around 83% of all ETFs in the U.S. market saw zero inflows on April 14. He clarified that such occurrences are normal and attributed them to the creation and redemption of ETF shares, which only happen under specific conditions. Seyffart emphasized that market makers typically manage minor mismatches in supply and demand with no cause for alarm.

Critical Support Turns into Resistance for Bitcoin

Bitcoin’s short-term price action revealed crucial levels for traders to monitor. Independent trader Ali highlighted Bitcoin’s UTXO realized price distribution (URPD), identifying $62,000 as a pivotal support level. However, Bitcoin lost this support, becoming a significant resistance zone for bullish momentum. 

According to the URPD, $62,000 is a crucial support zone for #Bitcoin. Losing this level could shift the focus to the next significant demand area around $51,500.

Conversely, if $BTC climbs back above $66,250, it could significantly boost the chances of reigniting the bull run! pic.twitter.com/20zwfktZkx

— Ali (@ali_charts) April 16, 2024

IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model indicated that over 1.15 million addresses previously bought approximately 630,110 BTC within a price range of $62,858 to $64,670. This resistance suggested a challenging path for Bitcoin’s recovery compared to the support it enjoyed on the downside.