Bitcoin’s Downfall Triggers $360M Crypto Liquidations: A Deep Dive

Key Points

• Bitcoin’s value dropped below $60,000 on April 30, 2024, leading to significant liquidation in the crypto market.
• Around $360 million worth of assets were liquidated across the market, with Bitcoin and Ethereum experiencing significant losses.

The sharp decrease in the value of Bitcoin (BTC) on April 30, 2024, led to a significant downturn in the cryptocurrency market. Bitcoin’s price fell below $60,000, its lowest in two weeks after hitting a high of $73,000 in March.

This sudden decline caused substantial liquidation for crypto traders who had wagered on a price increase for Bitcoin.

Impact on the Crypto Market

CoinGlass data revealed that long traders suffered losses of $246 million within a day. The drop in Bitcoin’s price caused a ripple effect across the entire crypto market, leading to widespread liquidation as investors scrambled to adjust their positions in response to the volatility.

The total assets liquidated in the market were nearly $360 million. Short traders accounted for about $114 million of these losses. However, the market has since slightly recovered, reducing the total loss to $290.80 million.

In just four hours, traders on both the long and short sides experienced combined losses of $8 million. Significant losses were reported among Bitcoin, Ether, JTO, and ZETA traders.

Bitcoin and Ethereum Prices

Currently, Bitcoin is trading around $57,000, reflecting a more than 10% decline over the past week. Ethereum also saw a 7% decrease, trading at $2,870 during the same period.

CryptoQuant analysts attribute the market decline to a decrease in interest in spot Bitcoin exchange-traded funds (ETFs) in the US. They noted that the ETF market could see its first significant net outflows since these investment products were launched in January of the same year.

Market Decline Factors

Besides the reduced demand for Bitcoin ETFs, analysts also cited a slowdown in Bitcoin demand among institutional investors as a factor contributing to the market downturn. They observed a decrease in the Bitcoin balance of permanent holders and large investors in the spot market.

The growth of Bitcoin whale demand peaked at a monthly growth rate of 12% in late March and has now slowed down to 6%. Price rallies are typically driven by faster growth in Bitcoin demand from large investors, according to CryptoQuant analysts.

The report also highlighted a decline in the Coinbase Premium, which has been trending downward since early March, falling below zero in recent weeks. A negative Coinbase premium indicates that the price of Bitcoin is lower in the US compared to elsewhere, signaling reduced interest from US investors in purchasing Bitcoin.