Bitcoin’s Ugly Week: A $180 Million Shake-Out
This week, the crypto market took a drastic turn for the worse. Bitcoin, the leading cryptocurrency, plummeted to $65,000, its weakest price in four weeks. The CoinDesk 20 Index, a broad-market benchmark, shed almost 12% week-over-week. Smaller cryptocurrencies, such as Ether, Solana, Avalanche, Cardano, and Near, suffered even steeper declines, with losses ranging from 15% to 20%.
A snapshot of bitcoin’s price chart
The swift tumble resulted in the liquidation of nearly $180 million of leveraged derivatives trading positions across all crypto assets over the past 24 hours, most of them longs betting on higher prices. This week’s shake-out saw a total of over $870 million in liquidations, flushing excess leverage from markets.
The cryptocurrency market took a hit this week
Analysts and many market participants had anticipated an imminent breakout for bitcoin to new record highs, supported by a slower pace of inflation and softer economic data. However, attempts for rallies were quickly sold off, leaving BTC stuck in its sideways range.
Bitcoin miners contributed to the selling pressure
The Federal Reserve’s projection of only one rate cut for this year, less than the central bank’s previous forecast, dashed investor hopes for looser monetary policy coming this summer. Political uncertainty in Europe, with a snap election being called in France, also pushed the U.S. dollar index (DXY) higher against other major currencies to its strongest level in more than a month, putting pressure on bitcoin.
The Federal Reserve’s decision impacted the crypto market
Bitcoin also struggled with increased selling from miners and profit-taking from long-time holders near the $70,000 area, weighing on the broader crypto market.
Miners contributed to the selling pressure
As the crypto market continues to navigate these uncertain times, one thing is clear: the road to recovery will be long and arduous. But for those who believe in the potential of cryptocurrencies, this too shall pass.
A glimpse into the future of cryptocurrencies
