BTC lost nearly 8% on Tuesday, its greatest UTC drop since November 2022. ETF outflows likely caused the decrease. Bitcoin's {{BTC}} price correction accelerated Tuesday as U.S.-listed spot ETFs lost popularity.
Trading View data shows the top cryptocurrency lost over 8% to around $62,000. The largest daily percentage (UTC) drop since Nov. 9, 2022. After Sam Bankman Fried's third-largest exchange, FTX, went bankrupt, prices fell 14%. The daily performance shown below is the percentage gain or loss from midnight to 23:59:59 UTC.
Prices fell 15% from last week's record $73,500 high. The CoinDesk 20 Index fell 16% throughout the same period. According to trader and economist Alex Kruger, spot ETF outflows contributed to Bitcoin's recent price drop.
The greatest net outflow from spot ETFs on record was $326 million on Tuesday, according to Farside data. On Monday, Grayscale's ETF had a record $643 million outflow.
Number one cause of the crash: too much leverage (funding matters). #2 ETH causing market decline (ETF failed). #3 Bearish BTC ETF inflows (T+1 data).
Ether {{ETH}}, the second-largest cryptocurrency by market value, peaked at $4,000 after the Dencun upgrade last week, but has since dropped to $3,130. The decline is due to the U.S. SEC's decreasing likelihood of approving an ether spot ETF by May.
Early this month, long traders paid over 100% annualized funding to keep their bullish perpetual futures bets open, indicating an overheated crypto market. One-sided bullish leverage generally precedes price corrections. Investors will eagerly watch Wednesday's Federal Reserve rate decision and Chairman Jerome Powell's press conference.
This week's Fed rate decision and Powell's news conference are scheduled. This will reveal whether the Fed plans rate cuts this year. "Strong economy and higher-than-expected inflation keep the Fed hawkish without much pushback," said Amberdata derivatives director Greg Magadini.
Due to sticky consumer and producer price indices, the dollar index and U.S. Treasury yields have recently risen, reducing the attraction of risk assets like cryptocurrencies.
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