Bitcoin has seen a significant drop today, plummeting to an intraday low of $39,494.65.
Bitcoin has seen a significant drop today, plummeting to an intraday low of $39,494.65.
This latest drop has reduced its market capitalization to $784.8 billion with 24-hour trading volume reaching $30 billion.
As of the last update, Bitcoin has recovered slightly, trading around $40,032.31, but the 24-hour range indicates a tumultuous period for the cryptocurrency, having ranged between $39,494.65 and $41,269.88.
Understanding liquidation
The downward trend in Bitcoin value can largely be attributed to significant outflows from Bitcoin exchange-traded funds (ETFs).
In particular, the Grayscale Bitcoin Trust (GBTC) witnessed a staggering outflow of $640 million in just one day, the largest outflow it has ever experienced. The total amount withdrawn so far amounts to about $3.45 billion.
James Seyffart, the leading NFT analyst, pointed to this trend in its publication on social networks, underlining the increasing pace of these departures.
Additionally, analyst Holger Zschaepitz highlighted lower enthusiasm for Bitcoin ETFs, which coincides with a drop in the correlation between Bitcoin and tech stocks, which currently sits at a low of 0.3 last week.
Bearish sentiment from market analysts
The recent bearish sentiment around Bitcoin has fueled bearish posts from prominent detractors.
Peter Schiff, a well-known Bitcoin critic, took to X to express his bearish bias, focusing particularly on the ProShares Bitcoin Strategy ETF. This ETF, which tracks Bitcoin futures, has seen a drop of more than 50% in just over two years since its launch in October 2021. Schiff believes other ETFs are suffering the same fate.
Jim Cramer, another influential voice in the financial world, succinctly summed up the situation with a post saying: “Bitcoin = own hard,” after previously predicting that the flagship cryptocurrency would struggle to find a footing.