Bitcoin (
BTC
) is experiencing significant volatility today, with a 7% correction after reaching a new all-time high of $69,324 on the Coinbase exchange. While the price of Bitcoin has been boosted by the influx of funds into spot BTC ETFs and growing investor interest in cryptocurrencies, it remains highly volatile. Today’s sell-off is believed to be driven by a combination of profit-taking and liquidations in the futures market.
The surge in Bitcoin’s price can largely be attributed to institutional investors investing in approved spot BTC ETFs. CoinShares data shows that institutional investors have invested $7.6 billion in crypto assets so far in 2024, with over $1.8 billion flowing into crypto investment products in the past week alone.
Of the $7.6 billion invested in crypto assets, over $7.3 billion has gone into Bitcoin specifically. Bitcoin’s total assets under management (AUM) far surpass other digital assets, with $62.71 billion currently deployed.
The momentum generated by the spot BTC ETFs has boosted market sentiment, with the Crypto Fear and Greed index reaching a level of “extreme greed” as Bitcoin’s price hit an all-time high. However, despite this extreme greed, the price of Bitcoin remains volatile, with open interest continuing to increase.
The sharp movement in the Bitcoin futures market can be seen through liquidations. Long liquidations coincided with the elevated volatility and contributed to the sharp decline in Bitcoin’s price. Within a 24-hour period on March 5, over $111 million worth of Bitcoin long positions were liquidated, with $35 million liquidated within just one hour of the BTC price reaching its all-time high.
Some analysts speculate that this may have been a new experience for those who recently entered the market.
In addition to institutional investors, retail investors have also shown increased interest in Bitcoin. For a brief period on March 5, all Bitcoin on-chain addresses were in profit, a situation that had not occurred since the previous all-time high. This prompted investors to realize their profits, resulting in the second-largest profit realization of 2024, reaching over $3 billion.
The combination of liquidations, profit-taking, and ongoing institutional inflows has contributed to the volatility of Bitcoin’s price today.
It is important to note that this article does not provide investment advice or recommendations. All investments and trading decisions involve risks, and readers should conduct their own research before making any decisions.