The post 3 Reasons Why Bitcoin (BTC) Dropped by $8K in Days appeared on BitcoinEthereumNews.com. Home » Crypto News One of the key reasons could be the sharp reversalThe post 3 Reasons Why Bitcoin (BTC) Dropped by $8K in Days appeared on BitcoinEthereumNews.com. Home » Crypto News One of the key reasons could be the sharp reversal

3 Reasons Why Bitcoin (BTC) Dropped by $8K in Days

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One of the key reasons could be the sharp reversal in Bitcoin ETF flows.

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Summarize with AI


Summarize with AI

It was less than a week ago when bitcoin was riding high, trading at a six-week peak at $76,000. It had recovered $13,000 since the war in the Middle East began, and was the best performing asset during this time of new uncertainty (aside from oil, perhaps).

However, the subsequent rejection was quite painful, especially over the past 24 hours, and bitcoin found itself dropping toward $68,000 earlier today. As such, it had lost $8,000 in mere days, and here are some of the possible reasons.

Fed’s (Lack of) Changes

Although essentially all investors and experts were expecting no changes to the key interest rates in the US from the Federal Reserve during its second meeting of the year, Chair Powell’s hawkish speech after the event brought some more pain for risk-on assets like crypto.

After his second-to-last FOMC meeting, the current Chair said the central bank remains concerned about stubbornly elevated inflation, especially since the war in the Middle East pushed oil prices up by double digits.

According to predictions markets as well as some futures-implied products focused on the Fed’s policies, the interest rate cuts will be paused for over a year. The Kobeissi Letter, in a post from today, outlined the significance of such a potential development, if true, of course.

The War Itself

Obviously, the ongoing and quickly escalating tension in the Middle East is another major reason behind BTC’s recent correction. This was more than evident on Sunday morning when the cryptocurrency fell by a few grand in minutes after US President Trump threatened to ‘obliterate’ Iran’s power plants if the country doesn’t safely reopen the Strait of Hormuz.

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The POTUS gave his enemy 48 hours to allow ships to pass through the key region; otherwise, they will experience another wave of countless attacks.

ETF Reversal

The spot Bitcoin ETFs enjoyed a healthy streak of seven consecutive days in the green, from March 9 to March 17. Its price peak at $76,000 came just as the inflows tapped $200 million on Tuesday, but the three days that followed were quite the opposite.

Investors pulled out $163.52 million on Wednesday, another $90.19 million on Thursday, and $52.11 million on Friday. Although the week ended with a net positive of $95.18 million, the last three trading days saw more than $300 million being pulled out, which coincided with the asset’s price correction.

Spot Bitcoin ETFs Net Flows. Source: SoSoValue
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Source: https://cryptopotato.com/3-reasons-why-bitcoin-btc-dropped-by-8k-in-days/

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