BTC breaks the position again, trades sideways, do you know the reason why the market is unstable?
Analysis of four major reasons for Bitcoin’s plunge:
Long liquidation events:
The Bitcoin market suffered a major deleveraging, with long liquidation levels surging. High financing rates show leveraged traders' optimistic expectations for the future, but the market is vulnerable to adjustments.
U.S. Dollar Index (DXY) Strengthens:
The DXY index hit new highs and the U.S. dollar strengthened, which usually causes investors to turn to safe assets and avoid high-risk investments such as Bitcoin. Although some analysts believe that risk assets may benefit, the current sentiment is biased towards caution.
Investors take profits:
Investors took massive profits after Bitcoin prices peaked, with the selling exacerbating the market decline. This behavior is common in bull markets and creates significant resistance to price tops.
Bitcoin ETF outflows:
The market witnessed significant outflows from Bitcoin ETFs, especially Grayscale GBTC. Despite inflows into other Bitcoin products, overall market sentiment is negative. The first quarter ended with profit-taking and confusion in expectations leading to market volatility.
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