Bitcoin experienced a drop of nearly 5%, falling to $65,000 for the first time in a week, as the overall crypto market capitalization decreased by 7%. Ethereum’s price also saw a decline, with the largest altcoin dropping by 8.5% in a 24-hour period. Coinglass reported that over 277,000 traders liquidated assets totaling $877.79 million within the same timeframe.
The decrease in BTC price is likely attributed to a pullback before the upcoming halving and miner capitulation. There is a common belief that the halving will trigger a new bull cycle for Bitcoin. Typically, a pullback occurs when traders take profits leading up to the halving, expecting a temporary peak before the actual event.
In preparation for the halving, many miners ceased BTC mining due to rising difficulty and operational costs. This week, Bitcoin mining difficulty reached an all-time high. The network has mechanisms in place to adjust difficulty levels to ensure consistent block time, compensating for fluctuations in total hashing power. When miners capitulate, hashing power decreases, prompting the network to lower difficulty levels, potentially making mining more profitable for those who continue.
However, the recent liquidation may also be fueled by investor doubts. Maraton Digital suggested earlier this week that this year’s halving might not have a significant impact on BTC price, as the token had already peaked early on due to substantial inflows from Bitcoin ETFs.
In other news, reports indicate that Hong Kong is set to approve its first Bitcoin and Ethereum ETFs.