Reasons Why Bitcoin Price Plunged Below $55,000

The price of Bitcoin fell by 9% in four hours due to a combination of negative on-chain and technical factors.

March 15, 2021 | AtoZ Markets – The premier cryptocurrency, Bitcoin (BTC) fell below the $60,000 mark reached on March 14. According to CoinMarketCap, over the past 24 hours, Bitcoin has fallen in price by almost 9%.

At 9:41 GMT, the price reached a local low at around $54,568 on the Bitfinex exchange. However, at the time of writing, the BTC/USD pair was trading at $56,390.

Bitfinex 1-hour BTC/USD Chart by TradingView.

Reasons Bitcoin fell 9% in 4 hours

The Block researcher Larry Cermak noted that in just half an hour there were liquidations for $1 billion.

Most liquidations occurred on the Binance and Bybit exchanges.

According to the observations of analysts at Glassnode, the inactive supply of Bitcoin for the last 3-6 months has reached a five-month high.

This may indicate a revival among investors wishing to lock in unrealized profits from investments in the first cryptocurrency.

Moreover, before the drop occurred, on-chain data analytics platform CryptoQuant pointed out large BTC deposits into Gemini.

Ki Young Ju, the CEO of CryptoQuant, said:

In addition to the selling pressure from whales, the recent Bitcoin rally being led by stablecoin inflows into exchanges was another bearish sign.

Ki noted that the rally was catalyzed by sidelined capital held in stablecoins rather than institutions in the U.S. He explained:

“Coinbase Premium Index was always significantly high when $BTC price breaking 20k, 30k, 40k, and 50k. It was significantly negative when the price breaking 60k. This 60k bull-run is not US institution-driven, it all came from stablecoins.”

The falling Bitcoin price pulled the rest of the market with it. This is how the top ten most capitalized cryptoassets look at the time of writing:

Data: CoinMarketCap.

The capitalization of the first cryptocurrency is $1.05 trillion. BTC dominance index – 60.3%.

Recall that on March 14, the bitcoin price updated its all-time high above $61,000.

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