The price of bitcoin fell sharply during a hectic day. Within hours, the price fell from $72,000 to $66,500, losing 7.5%. The drop saw more than $661 million in positions liquidated in the past 24 hours, affecting nearly 200,000 traders.

Bitcoin rose slightly back to the level around $68,000. The price is currently 8.3% lower than its all-time high. On March 14, this was still $73,737.

The vast majority of liquidations, as much as 80%, were long positions. Due to the sharp decline, $525.2 million worth of longs were liquidated in the past 24 hours. Liquidations of short positions totaled $136.5 million.

With a short position you make (extra) profit when the price falls, and with a long position you can (extra) profit from price increases. But at the same time, you can lose your investment if the price does the opposite of what you expect.

Analysts look at the ETFs and a trend change that is happening there. Pav Hundal, analyst at Australia’s Swyft, says the correction could continue to $60,000 or $50,000 if exchange-traded fund (ETF) volumes continue to decline.

“Many investors are concerned about recent inflation numbers, and if there is a sustained decline in ETF volumes, we expect a significant correction. What is concerning is that bitcoin ETF inflows fell 48% yesterday compared to their 14-day average.”

Total new money inflows into Bitcoin ETFs were just $133 million on March 14, the lowest this month.

This price drop today has also wiped out most of the accumulated Open Interest (OI) in the derivatives markets. The economic figures in the United States don’t help either. The Fresh Producer Price Index (PPI) was higher than expected, meaning the Federal Reserve may maintain high interest rates for an extended period of time.

Stock markets in Asia also showed declines after US economic data dashed hopes for lower interest rates.


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