The price of Bitcoin hit a new all-time high today, only to see a sharp 4% drop shortly thereafter. This article examines the reasons behind the decline.
Selling Pressure Spikes on the Charts
According to CryptoQuant, taker sell volume for Bitcoin reached $3.13 billion, a significant rise from typical levels. This indicates that traders started to lock in profits, adding immediate selling pressure to the market.
Macroeconomic Data Shakes the Market
Recent economic data from the U.S. also played a crucial role in traders' decisions. The Producer Price Index (PPI) came in at 3.3%, which is higher than analysts' expectations. An increase in the index points to potential inflation, which may impact interest rate cut expectations.
Billions Wiped in Liquidations
The correction affected the entire crypto market. In the past 24 hours, over $1 billion in leveraged positions were liquidated. Bitcoin accounted for $218 million of that total, while Ethereum experienced even greater losses, with $309.9 million liquidated.
While the current market situation raises concerns, historical patterns show that Bitcoin often rebounds from such dips. Investors should closely monitor developments.
