Shock! Bitcoin plummeted by $5,000 in 24 hours, and the reason behind it was...
Shock! Bitcoin, the world's largest cryptocurrency, experienced a shocking moment on April 2. It plummeted by US$5,000 within 24 hours, once falling below US$65,000 per coin, setting a new low since March 24.
What caused Bitcoin’s sudden collapse?
1. U.S. Treasury yields rise
Analysts believe that rising U.S. Treasury yields are one of the main reasons for Bitcoin’s plunge. Recently, U.S. Treasury bond yields have continued to rise, with the 10-year Treasury bond yield once exceeding 2.5%, setting a new high since 2019. Rising Treasury yields mean investors can earn higher risk-free returns, making risky assets like cryptocurrencies less attractive.
2. Whale selling
In addition, unusual behavior by a large Bitcoin holder, or "Bitcoin whale," may have exacerbated Bitcoin's decline. According to CryptoQuant data, the whale transferred more than 4,000 bitcoins to the Bitfinex exchange late on Monday night, causing the exchange's bitcoin reserves to surge. This typically signals an increase in selling activity, coinciding with a sudden drop in Bitcoin price at that time.
3. Market sentiment
Bitcoin price has always been affected by market sentiment. Recently, some investors have become concerned about the prospects of the cryptocurrency market, which may have led them to sell Bitcoin, further exacerbating the price decline.
What is the future of Bitcoin?
1. Bitcoin is still up 53% so far in 2024.
2. The Bitcoin halving event will occur in the second half of this month, which may have an impact on the price of Bitcoin. Historically, Bitcoin has experienced significant gains following halving events.
3. Bitcoin will rise another 50% or more in the next few months.
