Why is Bitcoin price down today?

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 10% from the all-time high on April 2. 

The contraction in Bitcoin price has led to over a 7% plunge to start the month of April.

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 by 38% and 20% during the 2016 and 2020 halving cycles.

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 2, over $115 million of long positions were liquidated. Bitcoin long liquidations spiked within 4 hours to over $21 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 $30 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: BTC price slips 4% to weekly low as Bitcoin bids line up toward $62K

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 the Bitcoin price to recover, especially as more financial institutions are embracing BTC.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Also Read More: World News | Entertainment News | Celeb News

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

US senators introduce new stablecoin bill

United States Senators Kirsten Gillibrand and Cynthia Lummis have introduced legislation establishing…

Chainlink co-founder notes importance of oracle networks following NYSE glitch

Following a glitch responsible for dropping the listed price of several securities…

More crypto AI alliances emerge following $7.5B token merger

On May 13, blockchain AI platform ChainGPT will hold the initial dex…

Trump promises to become the ‘crypto president’ — Law Decoded

Former United States President Donald Trump is intensifying his cryptocurrency advocacy as…