Bitcoin’s Recent Price Drop Triggers Significant Liquidations Amid Inflation Concerns

Bitcoin experienced its first drop below the $67,000 mark since April 4th, resulting in over $850 million in liquidations within the past day. This downward trend has also affected other asset classes, including the SP500 and gold, indicating broader concerns regarding CPI and inflation across various sectors.

Comparing the current phase of Bitcoin’s market cycle to previous ATH breaks suggests that the current Euphoria phase, characterized by market price discovery, is still in its early stages. Historically, Euphoria phases have witnessed substantial price corrections exceeding -10%, with many surpassing 25%. However, the current market has only seen two corrections of approximately 10% since breaking its ATH.

Amidst a month of price fluctuations, traders are eagerly awaiting the resumption of the crypto bull run. One key indicator to monitor during this period is the Mean Dollar Invested Age, which tracks the average age of investments in an asset held within the same wallet. A rising trend in this metric indicates stagnation, suggesting that old coins are remaining inactive in their respective wallets.

Historically, Bitcoin has seen a falling mean dollar invested age line during bull cycles, signaling increased activity and circulation within the network. 

Bitcoin Halving And ETF Net Inflow Data

However, despite the impending halving, Bitcoin’s mean dollar invested age line has remained stagnant in recent weeks. To sustain upward momentum, it will be essential for top stakeholders to reintroduce coins into circulation, driving this metric downwards.

According to data from Spotonchain, Bitcoin ETF net inflow for April 12, 2024, totaled -$55 million, marking a 160% decrease compared to the previous trading day. Notably, only Grayscale Bitcoin Trust and BlackRock iShares Bitcoin Trust reported flows, with all other Bitcoin ETFs registering zero net flows. 

The single-day outflow of Grayscale Bitcoin Trust increased from $125 million to $166 million, resulting in an overall negative net inflow. 

These developments underscore the current challenges facing the cryptocurrency market and the importance of monitoring key indicators to gauge its trajectory in the coming weeks.

Disclosure: This is not trading or investment advice. Always do your research before buying any Metaverse crypto coins.