Two factors contributing to the decline in Bitcoin's value and the catalysts for the upcoming upward momentum.
Analysts are confident that despite Bitcoin's price dropping below $67,000, the bull run is far from over.
A sharp 8% decline in the past 24 hours resulted in over $800 million in liquidations, with Bitcoin accounting for approximately $283 million of that amount, according to CoinGlass data.
However, market observers remain upbeat, citing Bitcoin and Ethereum's recent resilience following substantial price drops.
Jonathan de Wet, Chief Investment Officer at digital asset trading firm ZeroCap, emphasized the overarching influence of macroeconomic factors. He highlighted concerns about the US economy's trajectory, stating that prolonged downside movement would likely occur if the economy faces significant challenges. Nevertheless, he maintains a bullish outlook overall.
The positive outlook follows a surge in Bitcoin's price driven largely by the approval of 10 spot Bitcoin exchange-traded funds in January.
March witnessed a staggering $65 billion in volume flowing through US spot Bitcoin ETFs, surpassing previous records set in February, according to Bloomberg Intelligence analyst Eric Balchunas.
Despite the optimistic forecast, analysts provided various explanations for the recent crypto price drop.
De Wet suggested that macroeconomic shifts, such as concerning inflation figures and lower-than-expected retail sales in the US, likely contributed to the decline.
Ryan McMillin, Chief Investment Officer at Australian crypto fund manager Merkle Tree Capital, attributed the price dip to the unwinding of leveraged long positions.
This unwinding, known as a "flush in leverage," occurs when traders using borrowed funds to purchase assets, like Bitcoin, are compelled to sell to cover their positions amidst a significant price drop.