Bitcoin Plunges Below $67K as Crypto Market Faces Sudden Selloff

The cryptocurrency market experienced a sudden and sharp downturn on Friday, April 12, with Bitcoin and other large-cap assets taking severe hits. Bitcoin fell below $67,000 for the first time in over a week, leading to nearly $900 million in liquidations over the past 24 hours. According to Coinglass data, losses from leveraged Bitcoin and Ether positions contributed heavily to the liquidations. On-chain analytics firm Santiment attributed the downturn to concerns surrounding CPI and inflation, as both the crypto market and traditional assets, like the S&P 500 and gold, experienced significant declines.

Bitcoin Plunges Below $67,000 as Crypto Market Suffers Sudden Downturn

The cryptocurrency market experienced a sharp and unexpected decline on Friday, April 12, characterized by a significant drop in the price of Bitcoin and other major assets.

Bitcoin Price Plunges to Lowest Level in Over a Week

Bitcoin, the world's largest cryptocurrency, witnessed a precipitous decline of approximately 5% within a five-hour window, falling from above $70,000 to below $67,000. This represents the first time Bitcoin has traded below the $67,000 mark since April 4, according to blockchain intelligence firm Santiment.

Ethereum and Other Altcoins Follow Suit

The decline in Bitcoin's price was mirrored by a steep drop in the value of Ethereum, the second-largest cryptocurrency by market capitalization. Ethereum lost almost 8% of its value in less than 24 hours, highlighting the broader impact of the market correction.

Massive Liquidations in Futures Market

The abrupt market downturn has resulted in approximately $900 million in liquidations in the futures market over the past 24 hours. Data from Coinglass reveals that a significant portion of these liquidations stem from leveraged Bitcoin and Ether positions.

On-Chain Analytics Reveal Underlying Cause

On-chain analytics firm Santiment has attributed the recent decline in Bitcoin's price and the overall crypto market downturn to concerns surrounding inflation and the Consumer Price Index (CPI). CPI measures the change in prices of goods and services experienced by consumers.

Inflation Fears Drive Market Correction

The recent decline in the stock market and Bitcoin price is believed to be fueled by ongoing inflationary pressures, which have prompted the Federal Reserve (Fed) to maintain elevated interest rates. Persistent high inflation has raised doubts about the central bank's ability to lower interest rates throughout 2024.

Impact of Interest Rates on Cryptocurrencies

While Bitcoin and other assets like gold can serve as hedges against inflation, rising interest rates tend to lead investors to shift away from high-risk assets such as cryptocurrencies, resulting in a decrease in their prices.

Bitcoin Price Outlook

As of this writing, the Bitcoin price is hovering around $66,826, representing a 5% decline over the past 24 hours. Market analysts remain cautious, monitoring the impact of inflation fears and the Fed's monetary policy on the future trajectory of cryptocurrencies.

Traditional Assets Also Affected

Interestingly, the downturn in cryptocurrencies has been accompanied by a correction in traditional assets as well. Santiment reports that the S&P 500 index and gold prices have also fallen by 1.5% and 3.4%, respectively, suggesting that macroeconomic concerns are weighing on both sectors.