Why is Bitcoin Down Today: Liquidations and ETF Outflow Hit BTC Price

Bitcoin Down After $394M Liquidations, Japan Rate Hike, ETF Outflows

Why is Bitcoin down today when many investors expected stability? This question is on every trader’s mind as BTC price slipped sharply in the last 24 hours.

According to Coinmarketcap, It fell around 4.56% and is now trading near $85,555. Neither was this particular drop caused by one particular event. Rather, it was influenced by various forces that affected the market. 

Source: Coinmarketcap

Heavy Liquidations Pushed BTC Lower

The primary cause for which Bitcoin crash presently is the massive liquidations occurring in the crypto market. As per the Coinglass liquidation data, within the previous 24 hours, there have been over $394 million worth of crypto-position liquidations.

These were mostly long positions, which means people were betting on a rise in price. But when the price began to drop, these positions were automatically closed by the exchanges. This created a sell-off, further pushing the price lower.

There were approximately $186 million BTC liquidations. It is evident that BTC and Ethereum saw huge liquidations, which shows that leverage greatly contributed to this crash.

Technical Levels Broken, More Selling to Follow

From a chart perspective, BTC drop signals became stronger after the price fell below the important $90,000 level. This level had acted as support earlier. 

Once it fell below this level, stop-loss orders were triggered. This pushed the prices down further. The RSI indicator indicates a weak momentum. This means that buyers are presently cautious.

Analysts predict that if it cannot retain itself close to $84,000, then the next major level of support could be found close to $80,000.

Global Markets Turn Risk-Off

Another reason why the cryptocurrency is dropping is weakness in global markets. Asian stock markets opened lower as investors waited for key U.S. economic data like jobs and inflation numbers.

In the U.S., stock indices also showed mild losses. The Nasdaq faced more pressure than the Dow, which usually signals risk aversion. Since BTC often moves with tech stocks, this cautious mood added pressure on crypto prices. 

The crypto-related stocks also went down, indicating a risk avert attitude among investors. MicroStrategy down by 8.14%, Circle down by 9.60%, and Bitmine Immersion Technologies down by 11% compared to a volatile Coinbase.

Japan Interest Rate Decision Adds Pressure

Markets are also reacting to news from Japan. The Bank of Japan is expected to raise interest rates to 0.75%, the highest level in decades.

Higher interest rates usually reduce risk appetite. Along with this, news about the Bank of Japan ETF sale made investors more cautious. Even though the ETF selling will be gradual, it signals tighter financial conditions, which is negative for risk assets like bitcoin.

US BTC ETF Outflows Weigh on Price

According to Sosovalue, Spot ETFs also showed weakness. The U.S. market recorded a total net outflow of $357.69 million. Fidelity alone saw outflows of over $230 million.

When ETFs see outflows, spot buying pressure reduces. This makes it easier for bitcoin down moves to continue.

What Happens Next?

Bitcoin Price Prediction: In the short term, the price may remain volatile. Holding above $84,000 is important. If this level breaks, a deeper pullback is possible. 

In the long run, analysts still believe bitcoin’s fundamentals remain strong. However, for now, caution remains high.

Bitcoin price crash is mainly due to liquidations, global uncertainty, and risk-off sentiment, not because this digital asset has lost its value.

Disclaimer: This article is for informational purposes only and not a financial advice, kindly do your own research before investing.