Bitcoin Price: Why BTC Price Is Falling Today?

Bitcoins price has shown fluctuations since it was introduced in 2009. It reached its point in April 2021 nearing $65,000 and hit its point in March 2020 falling below $4,000. In January 2024 Bitcoin went through a downturn after reaching a peak of $49,000 over a span of 20 months. It then dropped below $40,000. Eventually reached around $35,000 in the days. This indicates a notable price adjustment for Bitcoin, trading below $40,000, following its initial surge beyond $48,000 on the first day of trading post the SEC’s approval of 11 new Bitcoin ETFs. Currently, Bitcoin has taken a negative turn, declining by up to 20% from January’s peaks and experiencing a 6% drop in the past two days, settling at $39,000.

Current Market Performance of Bitcoin Price

As of now, the Bitcoin price stands at $39,676.64, displaying a 24-hour trading volume of approximately $30 billion. Bitcoin is down by 0.93% in the last 24 hours, maintaining its top position on CoinMarketCap with a market capitalisation of over $777 billion. The circulating supply of Bitcoin is approximately 19 million coins, with a maximum supply capped at 21 million BTC coins. BTC is trading at 39,919.18 at the time of writing.

Top Reasons Why Bitcoin Price is Falling

1. Spot BTC ETF Launch Disappointment

The recent crash follows the launch of spot BTC ETFs in the US, a development highly anticipated within the crypto community. However, the outcome fell short of expectations, with the ten new ETFs collectively attracting only $4.7 billion. Grayscale’s significant deposit of over $600 million worth of BTC on Coinbase and the now bankrupt FTX’s sale of nearly $1 billion worth of GBTC shares added to the decline.

With the hype around spot ETFs fading, profit-taking from crypto investors has intensified, leading to a substantial drop in Bitcoin’s price over the past two weeks.

Prominent Bitcoin skeptic Peter Schiff, with a history of forecasting Bitcoin’s demise, attributes the drop to the failure of spot BTC ETFs to meet expectations.

2. Wave of Liquidations

The recent shift in Bitcoin prices often referred to as a ‘massive liquidation,’ occurs when a substantial number of traders are compelled to close their positions due to factors like margin calls or stop-loss orders. This phenomenon exerts downward pressure on the Bitcoin price, with more supply entering the market and a decrease in demand.

Based on data from Coinglass, over $52.8 million long positions were liquidated in the last 24 hours, with cross-crypto long liquidations totaling more than $23 million. Long liquidations exceeded $100 million in just one hour, according to data from Arkham Intelligence.This coincides with Bitcoin’s price falling below $39,000.

Source: Coinglass

Analysts attribute this decline to GBTC liquidations by bankruptcy estates, like FTX, which hold significant GBTC shares sold nearly bitcoins worth $1 billion. Additionally, some experts highlight profit-taking activities by major investors and a general bearish sentiment among everyday investors

What Lies Ahead for Bitcoin?

Analysts suggest that unless buying demand swiftly returns, Bitcoin could continue its descent in the latter half of the week, possibly dipping below $34,000 this month. The disappointment surrounding spot ETFs has facilitated an easier exit for long-term holders, contributing to the recent price decline.

Looking ahead, experts believe that Bitcoin’s price trajectory will depend on the ability of bulls to build momentum around the current price levels near $40,000. Some foresee a potential return to $38,000 if this momentum is not achieved. Despite the recent turmoil, there is optimism that ETF selling will ease, paving the way for a more stable uptrend.

The upcoming Bitcoin halving event in April 2024 is anticipated to impact the cryptocurrency’s price positively, following historical patterns observed in previous halving events. This could bring a new dynamic to Bitcoin’s market dynamics, potentially influencing its price in the months to come.

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