The biggest cryptocurrency, Bitcoin (BTC) saw a horror show on Wednesday as it broke down below the $57,000 price level. Amid the ongoing turmoil, an investment bank had predicted that this plunge might lead to a further decline towards the $50,000-$52,000 levels.
Is bitcoin in trouble?
The global crypto market printed heavy red indexes over the last 24 hours as the cumulative cap dropped by around 5% to stand at $2.13 trillion. However, the trading volume saw a jump of 28% to stand at $98 billion.
Bitcoin recorded a price drop of more than 12% in the last 24 hours. This drop came in despite the recent launch of BTC and ETH linked Exchange-Traded Fund (ETF) in Hong Kong. BTC price is down by over 6% in the last 24 hours. It is trading at an average price of $57,167, at the press time. Its 24 hour trading volume is up by 35% to stand at $44.1 billion.
According to the report, Standard Chartered Bank highlighted five consecutive days of outflows from US spot Bitcoin ETFs. This led to BTC’s decline below the average ETF purchase price. This situation shows that more than half of the spot ETF positions are now underwater. This has raised the risk of more liquidations ahead.
ETFs not helping?
The recent launch of spot ETFs in Hong Kong received poor headlines, focusing on turnover volume rather than net asset positions. This has contributed to negative sentiment surrounding the market.
It is important to note that macroeconomic turbulence has impacted crypto.
Standard Chartered hinted at considering buying Bitcoin if it reaches the $50k-$52K range. It added that it would do it if the US Consumer Price Index (CPI) data release comes in favor of inflation.
Despite the recent downturn, Bitcoin remains up by 35% year to date (YTD). It has doubled in value compared to the last year. However, high profit-taking by investors had led to its price decline. ETF sell off has added to the recent downward trend.