The Bitcoin mini crash that occurred today, June 24, 2024, appears to have been driven by several factors:
1. Mass Liquidations: According to CoinDesk, more than $84 million in derivatives were liquidated in a few hours, mostly in long positions. These types of liquidations typically occur when traders are unable to meet margin requirements, exacerbating market volatility.
2. Inflation Expectations and Fed Policies: The anticipation of key inflation data, specifically the Personal Consumption Expenditures (PCE) Price Index, has also created uncertainty in the market. Higher-than-expected inflation data could lead the Federal Reserve to keep interest rates high for longer, negatively affecting risk assets like Bitcoin.
3. Fear and Panic in the Market: A temporary interruption in the Coinbase platform increased panic among investors. During this outage, many users were unable to access their accounts, causing massive sell-offs and contributing to a significant loss in Bitcoin's market cap.
4. Correction After a Rally: Bitcoin's recent rally, fueled by fear of missing out (FOMO), could be experiencing a correction. Analysts have warned that the enthusiasm around Bitcoin could fade, causing a further drop in price.
These combined factors have contributed to the sharp decline in the price of Bitcoin, reflecting the market's high volatility and sensitivity to both technical and macroeconomic events.