Bitcoin Liquidations Soar Amid Plummeting Prices as Demand Wanes

Significant Bitcoin liquidations surpassed $145 million in the past 24 hours, with prices dropping to multi-month lows. Market analysts attribute the price adjustment primarily to a decline in demand from US-based buyers. Approximately $166 million worth of Bitcoin positions were liquidated over the same period, while liquidations across the broader crypto market exceeded $463 million. According to Coinglass data, the vast majority of crypto liquidations, approximately $398 million, represented long positions.

Bitcoin Liquidations Surge as Price Plummets Amidst Decline in Demand

The cryptocurrency market has witnessed a significant downturn, with Bitcoin liquidations exceeding $145 million within the past 24 hours, pushing the price of the flagship digital asset to a multi-month low. Analysts have attributed this latest price correction primarily to a decline in demand from United States-based buyers.

Over the past day, approximately $166 million worth of Bitcoin positions have been liquidated. The broader cryptocurrency market has experienced over $463 million in liquidations during the same period. According to data from Coinglass, the vast majority of these combined crypto liquidations, amounting to around $398 million, involved long positions.

Bitcoin, the world's largest cryptocurrency by market capitalization, has fallen to $57,161 at the time of writing, representing a decline of approximately 8% over the past 24 hours. Ether, the second-largest cryptocurrency, has dropped by 6.2% to $2,870 during the same period.

Demand-Driven Price Correction

This latest price correction for Bitcoin has been primarily driven by a slowdown in the growth of demand for the asset, according to the CryptoQuant market report released this week. The report highlighted slower growth in the Bitcoin balances of both long-term holders and large 'whale' investors on the spot market.

"Bitcoin whale demand growth 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," noted CryptoQuant analysts.

The报告further emphasizes the lack of demand for Bitcoin through the Coinbase premium, which has been trending down since early March and has recently dipped below zero. "When the Coinbase premium declines below zero, it indicates that the price of Bitcoin is lower in the U.S. compared to outside the country, suggesting lower appetite from U.S. investors to purchase Bitcoin," the CryptoQuant analysts added.

The decline in U.S.-based demand is also evident in indicators suggesting that the U.S. spot Bitcoin exchange-traded fund (ETF) market is on track to experience its first month of net outflows since multiple funds launched on January 11.

New Price Target for Bitcoin

CryptoQuant analysts have established a new short-term price target for Bitcoin between $55,000 and $57,000, observing that the current Bitcoin price is already below traders' cost basis. "From a short-term valuation perspective, prices could reach $55,000-$57,000. This level is 10% below the current cost basis of traders, at $63,000, which has been the ultimate support for prices during bull markets," the analysts stated.

The report also highlights an increase in Bitcoin supply, as Bitcoin miners have amplified their selling activity over the past month. Notably, the 30-day average of daily miner selling has surged to its highest level since early January.

Bitcoin dominance has marginally decreased over the past day to 50.3%, while Ether dominance has witnessed a slight uptick to 15.7%, according to data from Coingecko. The global cryptocurrency market capitalization has diminished by 6.5% over the past 24 hours, currently standing at $2.25 trillion, as per The Block's Prices Page.

The GM 30 Index, which represents a basket of the top 30 cryptocurrencies, has declined by 6.8% to 118.77 during the same period.

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