Bitcoin has been falling for several consecutive days. It has fallen below US$64,000 at noon today. Compared with the record high of US$73,800 set on March 14, it has dropped by a full US$10,000. Why is Bitcoin correcting sharply? Is the bull market over?
From the perspective of the encryption market and macroeconomics, there may be three main reasons:
1. Historically, Bitcoin will correct before halving
According to historical trends, Bitcoin has officially entered the "danger zone" before halving, because according to past halving experience, Bitcoin usually begins to correct around 14-28 days before halving.
In the last two periods, before the halving in 2020, Bitcoin had a correction of up to 20%; before the halving in 2016, Bitcoin had a correction of up to 40%. But today there are about 34 days left before Bitcoin’s fifth halving, which seems to be ahead of schedule.
This may be because Bitcoin usually rises in advance before halving, but this round of Bitcoin hit a new all-time high, so some investors began to choose to sell to lock in profits, promoting an early correction of Bitcoin.
Crypto analyst Miles Deutscher said that comprehensive risk reduction operations have been carried out this morning. I wrote my complete profit guide three days ago, maybe I should take my own advice and not be too greedy! However, the core position of the current market is still intact, so there is no need to panic. I'm just locking in some gains.
KOL with 700,000 fans Says, #Bitcoin short divergence is valid and remains so. I think we are close to a bottoming process with a smaller correction. Altcoin are bleeding -> huge opportunity.
@CryptoMichNL
@GVRCALLS said that after Bitcoin corrects to 63K-65K, I think we will see a sharp rise in Altcoin. Still nice to pick up some low market Altcoin.
@BullMarketPil said, I bought the bottom twice today. If I see #Bitcoin drop between 58K and 60K, be prepared to continue buy the dips. This correction may be the last one before a full-blown outbreak.
2. Grayscale Bitcoin ETF experienced significant outflows, exacerbating the decline of Bitcoin.
The approval of a Bitcoin spot ETF today injects a large amount of new capital into the crypto market, which is seen as a major catalyst for Bitcoin's bull run. As inflows of capital looking to get in have naturally slowed, the catalyst effect of the Bitcoin spot ETF has also diminished.
Grayscale Bitcoin Trust (GBTC) saw an outflow of $643 million on Monday, the largest outflow since converting to an ETF on January 11. Previously, the nine new spot Bitcoin ETFs listed at the same time received strong demand, which was enough to make up for the large outflow of GBTC, but now the funds flowing into the products of giants such as Fidelity Investments and BlackRock are also decreasing.
According to monitoring by Farside Investors, Bitcoin spot ETF had a net outflow of US$154.3 million on March 18, and Grayscale GBTC had a net outflow of US$642.5 million that day, setting the highest single-day outflow record since January 11. However, the nine new spot Bitcoin ETFs listed at the same time have received strong demand, making up for the outflow of GBTC, but now the funds flowing into giant products such as Fidelity Investments and BlackRock are also decreasing, among which BlackRock IBIT Net With an inflow of US$451.5 million, Fidelity FBTC had a net inflow of US$5.9 million yesterday, setting a record for the lowest inflow in a single day. 
Singapore-based cryptocurrency trading firm QCP Capital said it would “pay close attention to today’s total ETF flow data,” adding that “a net negative number would be a clear bearish signal.”
3. Expectations for a rate cut by the Federal Reserve weaken, and Japan raises interest rates for the first time in 17 years
On Monday, swap contracts predicting the Fed's decision once showed that the chance of a rate cut in June was less than 50%. Those contracts ended lower, reflecting expectations that a rate cut at the June meeting was only slightly more likely than no rate cut. Federal Reserve officials are likely to revise their forecasts as they wrap up their two-day meeting on Wednesday, hinting at smaller rate cuts, as inflation and economic growth data come in stronger than expected.
On the other hand, on March 19, the Bank of Japan raised its benchmark interest rate from -0.1% to 0-0.1%, marking the first rate increase since 2007. The eight-year era of negative interest rates officially ended. The Bank of Japan ended the world's last negative interest rate and yield curve control regime, ending the most aggressive monetary easing program in modern history.
The above three reasons may have simultaneously promoted this sharp correction in the crypto market. So is this correction over?
I'm afraid not that fast.
