Bitcoin Crash Before Halving – 1B Liquidated

Bitcoin (BTC) suffered a sharp decline just days ahead of the halving event. It slumped more than 6% to $65,000, triggering a broader 7.8% correction across cryptocurrency markets. Altcoins also did not escape unscathed, with the top 10 coins experiencing corrections in the range of 8-15%.

half life dip

About $1 billion in bullish cryptocurrency bets were liquidated in the past 24 hours as the price of Bitcoin halved, marking the biggest drop in a month, according to Coinglass data. This financial overhaul comes as rising geopolitical tensions have investors flocking to traditional safe havens such as bonds and the dollar.

The turbulence was not limited to cryptocurrencies. The S&P 500 and gold prices have rebounded in tandem, suggesting investors are grappling with CPI and inflation concerns and the likelihood of a Federal Reserve rate cut is diminishing.

In the derivatives market, anxiety is growing among traders, especially ahead of the Bitcoin halving, which has historically been considered bullish. Implied volatility in Bitcoin options has recently surged, indicating a decline in market participants’ confidence in price direction. This upward trend forces traders to pay more to hedge existing positions or speculate on potential price movements.

Bitcoin’s volatility has increased amid global financial market turmoil due to geopolitical risks. The implied volatility of short-term contracts soared from 59% to 71% in just two days, indicating growing expectations of near-term price movements.

One explanation is that traders are more likely to be bearish because they are uncertain, but are willing to pay more for options to receive protection against price movements. They are probably paying high premiums to purchase downside protection.

Meanwhile, altcoin markets have also witnessed significant corrections. Ether, Solana, Dogecoin, Cardano, and Polkadot all saw significant declines, with losses ranging from 12% to 15%.

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