Bitcoin (BTC) Takes A Hard Hit And Drops Back To $66,000 — Altcoins Plummet Even More

On Friday (April 12), Bitcoin (BTC) and other cryptocurrencies experienced a sharp decline as negative sentiment from traditional markets, heightened by increased geopolitical tensions, spilled into the digital asset space.

During a rapid sell-off in the U.S. trading session, Bitcoin dropped below $66,000, having neared the $71,000 mark just a few hours earlier. By the time of reporting, Bitcoin had recovered slightly to $66,700, representing a drop of over 5% in the last 24 hours.

Ethereum (ETH), the second-largest cryptocurrency by market capitalization, saw a decrease of up to 12% to $3,100, although a subsequent recovery reduced the loss to 8%.

Smaller Cryptos Followed Bitcoin And Suffered Losses Of 15-20%

During this volatile market episode, smaller cryptocurrencies were impacted by even steeper declines. The CoinDesk 20 Index, which tracks major digital assets, fell by nearly 10%. Notably, Cardano’s ADA, Avalanche’s AVAX, Bitcoin Cash (BCH), Filecoin (FIL), and Aptos (APT) experienced sharp drops ranging from 15-20%.

This downturn led to the most significant leverage liquidation event in a month, with approximately $850 million worth of leveraged derivatives positions across all cryptocurrencies being wiped out, according to CoinGlass data. Of these, $770 million were long positions that had anticipated price increases but were abruptly liquidated due to the sudden market drop.

The market downturn coincided with a decline in U.S. stock markets, driven by escalating concerns of an expanding conflict in the Middle East following warnings from U.S. officials that Iran might be preparing a significant assault on Israel.

Risky Scenario Made Treasury Bonds And The US Dollar Surge

As traders sought out protective investments, Treasury bonds and the U.S. dollar index (DXY) experienced a significant increase, while major U.S. stock indices, including the S&P 500 and Nasdaq 100, declined by 1.7% shortly before the market closed. Gold, traditionally viewed as a safe-haven asset, reached a new record high above $2,400 before reducing its gains, and oil prices edged up by 1%.

The digital asset investment firm Ryze Labs, previously known as Sino Global Capital, indicated in a commentary released on Friday that it expects some “short-term market softness” for cryptocurrencies during the impending tax season. Despite this near-term caution, Ryze Labs remains optimistic about the long-term prospects, projecting that a slowdown in quantitative tightening and possible adjustments in monetary policy to support U.S. government debt rollovers will bring some relief to the asset class.

According To Most Halving Predictions, Bitcoin Will Most Likely Bounce Back To The $70K Mark

Despite all action, there is no definitive reason for Bitcoin’s downturn today, but it appears to be a normal market correction, given that trading volumes have increased by 15% in the last day. It is expected that the cryptocurrency may rebound within the next day. However, the upcoming Bitcoin halving is likely to stabilize its price, preventing significant declines unless an exceptionally major event occurs.

Predictions related to the Bitcoin halving suggest a swift recovery, potentially pushing its value above $70,000 soon. The recent decline might simply represent a brief lull before more dramatic market activity. It is anticipated that Bitcoin will reach new record highs this month following the halving, alleviating current concerns about its stability.

This event is expected to influence not only the cryptocurrency market but also the market for precious metals. As Bitcoin gains popularity, the price of gold could decrease as investors increasingly view Bitcoin as a superior investment option. This makes the upcoming halving event particularly important in shaping alternatives to the US dollar.