The recent crash in the crypto market, specifically in Bitcoin prices, has been attributed to a significant decrease in net flows into Spot Bitcoin ETFs. Data from Spot On Chain indicates that there has been a considerable decline in daily net inflows into these ETFs over the last few days. The trend started on Wednesday, March 13, with a 38% drop in daily net inflows, following the second-largest daily inflow for Spot BTC ETFs. This decline continued on Thursday, March 14, with a massive 80.6% crash compared to the previous day. While the ETFs are still experiencing positive inflows, the rising outflows pose a threat to the stability of Bitcoin prices.
Bitcoin Price Recovery
Following the flash crash that pushed Bitcoin prices below $66,000, there was a quick buy-up of the dip, indicating strong demand for BTC at lower prices. This demand helped boost the price, allowing it to rise back up before facing resistance at $68,700. Currently, Bitcoin is trading around $66,500, with $68,000 being the next significant resistance level to overcome. However, the mounting resistance at $68,700 poses a challenge for further price appreciation. The recent crash led to an 8% decline in Bitcoin’s price in just one day, bringing its market cap down to $1.33 billion.
Impact on Altcoins
The crash in Bitcoin prices had a ripple effect on other altcoins in the market. Popular cryptocurrencies like Ethereum, Dogecoin, and Cardano saw an average decline of 10% in response to Bitcoin’s price drop. This demonstrates the interconnected nature of the crypto market, where movements in Bitcoin prices can influence the valuation of other digital assets.
The recent instability in Bitcoin prices can be attributed to the decrease in net flows into Spot Bitcoin ETFs, signaling a shift in institutional buying behavior. While the market continues to experience positive inflows, rising outflows could potentially lead to further price declines in the future. It is essential for investors to stay informed about the dynamics of the crypto market and conduct thorough research before making any investment decisions to mitigate risks associated with market volatility.