Bitcoin experienced a sharp decline from its March 14 peak of over $73,600 to today’s low of under $60,800, translating to a -17% loss in value. This significant drop caused a flurry of activity on social media platforms, particularly X (formerly Twitter), where crypto experts fervently discussed the possible reasons behind this downturn and speculated about what the future holds for the world’s leading cryptocurrency .
Unpacking the Bitcoin Crash: Expert Opinions
Alex Krüger, a respected figure in both macroeconomics and crypto, was quick to identify the primary factors contributing to Bitcoin’s price collapse. According to Krüger, the collapse can be attributed to several key factors: excessive leverage in the market, Ethereum’s negative influence on overall market sentiment due to ETF speculation, a notable decline in Bitcoin ETF inflows, and the irrational exuberance surrounding Solana memecoins, which he refers to derogatory to as “shitcoin mania.”
Reasons for the accident, in order of importance
(for those who need it)
#1 Too much leverage (funding matters)#2 ETH drives market south (market decides ETF won’t pass)#3 Negative BTC ETF inflows (careful, data is T+1)#4 Solana shitcoin mania (it went too far)
March 20, 2024
WhalePanda, another influential voice within the crypto space, pointed out the alarming rate of ETF outflows, with a record $326 million leaving the market yesterday. This movement was particularly detrimental to GBTC, which had outflows of $443.5 million.
In contrast, Blackrock’s inflows stood at a paltry $75.2 million, which was the second lowest ever. Fidelity also saw just $39.6 million in inflows. “Not much to say, it’s bad for the price and we’ll probably see lower now as this news also affects sentiment. Let’s see what the flow is tomorrow. The positive thing is that we are about 30 days away from halving, and GBTC is getting straightened out,” he noted.
ETF flows through @FarsideUK yesterday.
We had $326 million in outflows. Largest outflow to date.
Blackrock didn’t save us from $GBTC, which was obvious with the price action.$GBTC had $443.5 million outflows, Blackrock had $75.2 million inflows, their 2nd lowest to… pic.twitter.com/hIingoYMly
March 20, 2024
Charles Edwards, founder of crypto hedge fund Capriole Investments, provided a historical perspective on Bitcoin’s recent price movement, suggesting that a 20% to 30% pullback is within the norm for Bitcoin bull runs.
“A normal Bitcoin bullrun pullback is 30%. Back in December we were already on the longest winning streak in Bitcoin history. A 20% pullback here brings us to $59K. A 30% pullback would be $51K . These are all levels that we should comfortably expect as possibilities,” he said.
Rekt Capital provided an analysis of Bitcoin’s price pullbacks since the 2022 bear market bottom, noting that the current pullback is only the fifth major pullback, with all previous ones exceeding a -20% depth and lasting from 14 to 63 days. In short, there are two important takeaways about this current retracement
The closer Bitcoin gets to a -20% pullback, the better the opportunity becomes.
Retractions need time to fully mature (at least 2-3 weeks, at most 2 months).
#BTC
Since the November 2022 Bear Market Bottom…
Bitcoin experienced the following pullbacks:
• -23% (February 2023) lasting 21 days
• -21% (April/May 2023) lasting 63 days
• -22% (July/September 2023) lasting 63 days
• -21% (January 2023) lasting 14 days
This… pic.twitter.com/cQyQOLA5Zv
March 19, 2024
Alex Thorn, head of research at crypto giant Galaxy Digital, previously warned of the likelihood of significant corrections during bull markets, suggesting that the current pullback is relatively standard. “Two weeks ago, I warned that major corrections were not only possible, but *probable* in Bitcoin bull markets. At -15% this is historically pretty standard. Bull markets are climbing a wall of concern.”
Macro analyst Ted (@tedtalksmacro) focused specifically on the implications of the upcoming Federal Open Market Committee (FOMC) meeting. He highlighted the massive outflow of spot BTC ETFs and attributed it to traders’ cautious stance ahead of the FOMC decision and the potential impact of tax season in the US.
However, after the drop to $60,800, Ted suggested that the market has fully priced in the worst-case scenario, indicating a potential bullish reversal if the FOMC’s decisions match market expectations for rate cuts by the end of the year. He stated:
Time to bid. FOMC hedging done, worst case priced. The only thing that happens from here is that those protective positions in or on the event relax today. Bulls should be in action here soon. […] The market priced in another hold from the Fed at today’s meeting, pricing in 3 rate cuts from them by the end of the year. Anything that strays from this from today’s new economic projection/dot material will cause the market to move sharply.
At press time, BTC was trading at $62,979.
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