Bitcoin’s price correction intensified as U.S.-listed spot ETFs lost their appeal, causing the leading cryptocurrency to drop over 8% to below $62,000. This marked the biggest single-day percentage decline since November 9, 2022, when prices tumbled over 14% due to FTX exchange going bankrupt. The recent pullback has seen prices retreat 15% from record highs of over $73,500, with the CoinDesk 20 Index also sliding 16% during the same period.
The price slide was influenced by various factors, including significant outflows from spot ETFs, according to trader and economist Alex Kruger. Data from investment firm Farside revealed a record net outflow of $326 million from spot ETFs on Tuesday, with Grayscale’s ETF witnessing a record outflow of $643 million on Monday. Kruger pointed out that excessive leverage, negative BTC ETF inflows, and the impact of Solana’s market frenzy contributed to the crash.
In addition to Bitcoin’s decline, Ether, the second-largest cryptocurrency, reached around $4,000 post-Dencun upgrade and has since fallen to $3,130. The reduced likelihood of the U.S. SEC approving an ether spot ETF by May was cited as a reason for the slide. Moreover, the crypto market appeared overheated earlier this month, with long traders paying high annualized funding to maintain their bullish futures bets, signaling a potential price correction. The upcoming Federal Reserve rate decision and Jerome Powell’s press conference will be closely monitored by investors for further insights into economic conditions and potential market impact.