Bitcoin took a sudden nosedive, its sharpest in over a month, setting off a wave of sell-offs in speculative cryptocurrency investments, causing significant losses in smaller digital currencies like Solana, Cardano, and Polkadot.
Data from Coinglass reveals that approximately $780 million worth of optimistic crypto bets were liquidated within the last day — the largest such plunge in a month. On Friday, the financial landscape was unsettled by heightened geopolitical tensions, prompting investors to seek refuge in safer assets such as bonds and the dollar.
Ether, the second-largest cryptocurrency, plummeted by as much as 12% at one juncture, marking its most substantial intraday decline since November 2022. This pressure intensified after the Ethereum Foundation disclosed last month that it was under investigation by the US Securities and Exchange Commission.
Chris Newhouse, a DeFi analyst at Cumberland Labs, noted, “As cryptocurrencies collectively align with risky assets, a slight dip in prices rapidly escalated into widespread liquidations.”
Bitcoin’s value dropped by as much as 7.5% to $65,214 before recovering slightly. Meanwhile, Solana and Dogecoin saw steeper declines, plummeting by around 12% and 13%, respectively, while Cardano and Polkadot each experienced drops of approximately 15%.
This sudden downturn followed a period of increasing Bitcoin prices, partially fueled by anticipation surrounding Bitcoin halving — an update to the code perceived as a positive market catalyst due to its potential to decrease the digital asset’s supply. Despite the setback, Bitcoin has maintained a roughly 60% increase in value this year.
Ravi Doshi, head of markets at FalconX, observed an influx of buyers seizing the opportunity before the impending halving next week.
Nevertheless, indicators in the options market suggest growing nervousness among speculators ahead of Bitcoin’s quadrennial code adjustment, which historically has been bullish for the cryptocurrency. The halving event is scheduled for around April 20th.
According to a report by Kaiko Research, implied volatility for Bitcoin options surged last weekend, reversing the previous week’s downward trend. Adam McCarthy, a research analyst at Kaiko, explained that a rise in implied volatility typically indicates diminished confidence among market participants regarding price direction. Consequently, traders may be more willing to pay higher premiums to hedge existing positions or speculate on potential price fluctuations — whether upward or downward.
