Home Bitcoin News Deciphering the Bitcoin Plunge: Unraveling the Factors Behind the Recent Price Drop

Deciphering the Bitcoin Plunge: Unraveling the Factors Behind the Recent Price Drop

Bitcoin Plunge

Understanding the Bitcoin Price Plunge

The cryptocurrency market as a whole has witnessed a significant downturn, with the global market cap plummeting by 5.96% in just one day. Ethereum, Binance Coin (BNB), Dogecoin, and Shiba Inu (SHIB) have all experienced substantial drops in their prices, echoing the broader market sentiment. However, the primary catalyst for this market crash is the decline in Bitcoin’s price, which fell by 8.7% from its record high of $73,750.07 in a single day. Bitcoin’s price currently hovers around $67,671.56, marking a 7.18% decrease in the last 24 hours. But what’s causing this downward spiral?

Reasons Behind the Bitcoin Price Drop

Higher-Than-Expected PPI Inflation Data: One of the leading factors contributing to the decline in Bitcoin prices is the revelation of higher-than-expected inflation, particularly concerning the Producer Price Index (PPI) reported by the US. In February, the PPI index, which includes raw material prices determining selling prices, surged by 0.6%, surpassing the anticipated 0.3%. This unexpected spike in inflation has rattled markets and drawn scrutiny from the Federal Reserve ahead of their March meeting. The implications of heightened inflation on purchasing power and overall inflation patterns have sowed uncertainty among investors, prompting a correction in Bitcoin’s price as investors adjust their portfolios.

Massive Liquidation Events: Another significant contributor to Bitcoin’s price decline is a series of massive liquidation events across the cryptocurrency market. According to Coin glass data, a staggering $241.9 million worth of assets were liquidated within 24 hours, with $194.1 million in long positions being liquidated. This widespread liquidation activity, affecting over 193,000 traders, has exerted downward pressure on Bitcoin’s price, exacerbating the market’s overall bearish sentiment. The magnitude of these liquidations, coupled with Bitcoin’s struggle to stay above the $70,000 mark, has intensified concerns about the cryptocurrency’s short-term prospects.

Is Bitcoin Approaching a ‘Danger Zone’?

Renowned crypto analyst Rekt Capital warns that Bitcoin may be edging closer to a critical “Danger Zone” marked by previous instances of Pre-Halving Retraces. Historically, Bitcoin has experienced retracements within 14-28 days before a Halving event, a pattern that is repeating as Bitcoin is positioned 33 days away from the impending halving in mid-April 2024. The anticipated sell-off by miners ahead of the halving could potentially drive Bitcoin’s price lower, raising concerns of an imminent crash in the coming weeks.

What Lies Ahead for Bitcoin’s Price?

As the Federal Open Market Committee (FOMC) meeting looms on March 20, traders brace for potential volatility in the cryptocurrency market. Despite short-term sell-off possibilities, analysts remain optimistic about Bitcoin’s long-term uptrend, buoyed by sustained demand for daily spot Bitcoin ETFs and bullish expectations by year-end. However, the market sentiment is shifting, with declining implied volatility and a cooling phase evident in block options orders, signaling a potential transition to a bull market.

Credi BULL Crypto, another crypto analyst, observes a recent market drop, leading to a decline in Open Interest (OI). Despite this downturn, the analyst identifies a support level between $63,000 and $64,000, known as the “green zone,” where a bounce or price reversal could occur. This range presents a logical area for a shift in market dynamics and aligns with the elimination of remaining OI buildup, offering a potential turning point for Bitcoin’s price trajectory.


Bitcoin’s recent price plunge has sent shockwaves through the cryptocurrency market, prompting investors and analysts to reassess their positions and outlooks. While the reasons behind Bitcoin’s decline are multifaceted, ranging from inflation concerns to massive liquidation events, the path forward remains uncertain. As traders navigate these turbulent waters, vigilance and adaptability will be paramount to weathering the storm and seizing opportunities in the ever-evolving cryptocurrency landscape.

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Pankaj K

Pankaj is a skilled engineer with a passion for cryptocurrencies and blockchain technology. With over five years of experience in digital marketing, Pankaj is also an avid investor and trader in the crypto sphere. As a devoted fan of the Klever ecosystem, he strongly advocates for its innovative solutions and user-friendly wallet, while continuing to appreciate the Cardano project. Like my work? Send a tip to: 0x4C6D67705aF449f0C0102D4C7C693ad4A64926e9

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