Why Did Bitcoin Price Drop To $67,000, And Ethereum Price Dropped Below $2,000?
Bitcoin rally back to $73,000 the area did not last long as the leading cryptocurrency price action converted as a week it came to an end and fell to around $67,000 after gaining strength for a while last week, dragging Ethereum down with it until the price of ETH also lost the $2,000 price level.
However, the draw back of these leading cryptocurrencies product of few forces a simultaneous conflict: a war that costs absolutely no one and the institutions are looking for a quiet exit. Here is what happened.
Spot Bitcoin ETFs: From Boosting Rally to Draining Liquidity
One of the clear reasons for Bitcoin’s pullback is the same ETF complex that helped lift the price at the start of the week suddenly. he became a source of stress. SoSoValue data shows that US-based Spot Bitcoin ETFs have been shipped a strong entry into the beginning of the week, including $458.19 million on March 2, $225.15 million on March 3, and $461.77 million on March 4.
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That rally helped Bitcoin rise to around $74,051 intraday on March 4, but the tone changed soon after. By March 5, Bitcoin ETFs had reached a total outflow of about $227.83 million, and on March 6, outflows worsened to about $348.83 million, indicating that institutional demand softened just as Bitcoin was testing resistance in the mid-$70,000s.
Spot Bitcoin ETFs. Source: SoSoValue
Unsurprisingly, Ethereum also saw its exchange-traded funds flow decline in line with Bitcoin. SoSoValue data shows that US Spot Ethereum ETFs started the week strong, with $38.69 million in inflows on March 2, led by BlackRock’s ETHA at around $26.51 million. However, by the second half of the week, that demand had faded considerably.
Spot Ethereum ETFs recorded approximately $90.94 million in net withdrawals on March 5 and another $82.85 million in net withdrawals on March 6, with Fidelity’s FETH alone accounting for approximately $67.57 million of the March 6 withdrawals.
Spot Ethereum ETF share price. Source: SoSoValue
Profit Taking and Global Risk Aversion
The last piece is the macro backdrop. The jump from $73,000 to $74,000 invited short-term traders to lock in gains, especially after Bitcoin entered a clear resistance band and failed to push decisively. On-chain data shows that more more than 27,000 BTC in profit was sent to trade by short-term holders within 24 hours.
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However, investors are not only facing crypto-related concerns. Financial markets are still pricing in conflicts in the Middle East. Iran responded US-Israel is attacking by not only firing retaliatory strikes but also successfully closing the Strait of Hormuz, through which about one-fifth of the world’s oil passes. That shutdown is what really upset the markets.
When Bitcoin lost its supremacy, Ethereum followed with more strength. At the time of writing, Bitcoin is trading at $67,500. On the other hand, Ethereum is trading at $1,975.
The featured image was created with Dall.E, a chart from Tradingview.com
