Why is Bitcoin price down today?

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Bitcoin price is down today after the rebound to $66,000 evaporated as traders cautiously observe how the market reacts to geopolitical events.

Why is Bitcoin price down today?

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The bullish momentum that propelled Bitcoin (BTC) to an all-time high of $73,835 on March 14 is waning and Bitcoin price is down 13% from the all-time high on April 15. 

The contraction in Bitcoin price has led to over a 7% plunge in one week despite Ether (ETH) price nearing 3-year lows versus BTC.

Bitcoin price. Source: TradingView

Let’s take a closer look at the factors impacting Bitcoin price today.

Bitcoin is in its standard pre-halving retrace

Some analysts believe that Bitcoin is at the beginning of the pre-halving phase that historically follows a certain pattern. Similar to previous halvings, BTC’s price appears to be following the five phases of the Bitcoin halving.

The timing of the pre-halving drawdown comes 18 days before the expected Bitcoin halving date on April 20.

An X social network post from crypto trader and independent analyst Rekt Capital suggested that the ongoing price action is part of a pre-halving retrace, which has seen BTC dip 20% during the 2020 halving cycle.

Bitcoin halving comparisons. Source: Rekt capital

Bitcoin liquidations ramp up

A sharp movement in the Bitcoin futures market can be noted by looking at liquidations. The timing of the long liquidations coincided with elevated volatility. In a 24-hour period on April 15, over $43.7 million of long positions were liquidated. Bitcoin long liquidations spiked within 4 hours to over $20.6 million on the same day.

Bitcoin liquidations. Source: Coinglass

When BTC longs are liquidated without buying pressure from traders, Bitcoin price is negatively affected. Bitcoin trading volumes dropped over $24 billion from the March 5 year-to-date peak of $45 billion in daily activity.

Bitcoin trading volume. Source: Newhedge

Read More: Bitcoin Halving: Latest News and Full Coverage by Cointelegraph

The drop in exchange trading volume comes as spot selling continues to pressure Bitcoin price.

Short-term holders ticking up

In addition to trading volume decreasing more than half from year-to-date highs, long-term holders are de-risking and profit-taking. The most recent buyers of Bitcoin seem to be short-term holders. Short-term holders, as a cohort, have the highest BTC supply since July 26, 2021, which may lead to the continued fall of Bitcoin prices.

Bitcoin short-term holder supply. Source: Glassnode

Related: $70K BTC price by the halving? 5 things to know in Bitcoin this week

To date, Bitcoin’s price continues to be directly impacted by macroeconomic events, and it is also likely that further regulatory actions, the BTC halving and the Federal Reserve’s monetary policy will continue to have some effect on the price of BTC.

In the long term, market participants still expect Bitcoin price to recover, especially as more financial institutions are embracing BTC.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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