Bitcoin (BTC) has experienced significant volatility today, with its price correcting by 7% after reaching a new all-time high of $69,324 on the Coinbase exchange. This fluctuation in price is believed to be a result of a combination of profit-taking and liquidations in the futures market.
The surge in Bitcoin’s price can largely be attributed to institutional investors investing in approved spot BTC exchange-traded funds (ETFs). CoinShares data shows that institutional investors have invested $7.6 billion in crypto assets in 2024, with over $1.8 billion flowing into crypto investment products in the past week alone.
Of the $7.6 billion invested in crypto assets, the majority, $7.3 billion, has been allocated to Bitcoin. Currently, Bitcoin has a total assets under management (AUM) of $62.71 billion, dwarfing other digital assets.
The momentum from spot BTC ETFs has boosted market sentiment, with the Crypto Fear and Greed index indicating “extreme greed” as Bitcoin’s price reached an all-time high. Despite this sentiment, the price of Bitcoin remains volatile, and open interest continues to increase.
The sharp movement in the Bitcoin futures market can be observed through liquidations. On March 5, over $111 million worth of Bitcoin long positions were liquidated within a 24-hour period. Additionally, $35 million worth of long liquidations occurred within just one hour of Bitcoin’s price reaching its all-time high.
Analysts have noted that this may be a new experience for those who have recently entered the market.
Furthermore, there has been an increase in retail investors’ interest in Bitcoin. For a brief period on March 5, all Bitcoin on-chain addresses were in profit, something that hadn’t occurred since the previous all-time high. As a result, investors began to realize their profits, with over $3 billion in profit being realized on that day alone.
The combination of liquidations, profit-taking, and institutional inflow has contributed to the volatility in Bitcoin’s price today.
It is important to note that this article does not provide investment advice or recommendations. Every investment and trading decision carries risks, and readers should conduct their own research before making any decisions.