Bitcoin (BTC) prices record their biggest one-day loss since the collapse of FTX

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Bitcoin (BTC) price correction accelerated on Tuesday as US-listed spot exchange-traded funds (ETFs) fell out of support.

The leading cryptocurrency by market cap has fallen more than 8% to below $62,000, data from charting platform TradingView shows. This is the biggest single-day percentage (UTC) decline since November 9, 2022. That day, prices fell more than 14% as Sam Bankman Fried’s FTX exchange, previously the third largest, went bankrupt. The daily performance mentioned here represents the percentage gain or loss in a day, starting at midnight UTC and ending at 23:59:59, UTC.

Prices have retreated 15% from last week’s record high of more than $73,500. The CoinDesk 20 Index has declined 16% in the same time frame.

According to trader and economist Alex Kruger, Bitcoin’s latest price drop was caused by several factors, including withdrawals from spot ETFs.

Provisional data published by investment firm Farside shows there were net outflows of $326 million from spot ETFs on Tuesday, the largest on record. Grayscale’s ETFs saw record outflows of $643 million on Monday.

“Causes of the crash, in order of importance: #1 Too much leverage (funding matters). #2 ETH driving market south (the market decided the ETF was not going to pass). #3 Negative BTC ETF flows (careful, data is T+1). #4 Solana shitcoin mania (it went too far),” kruger said on x,

Ether (ETH), the second-largest cryptocurrency by market cap, reached a peak of nearly $4,000 following last week’s Denkun upgrade and has since fallen to $3,130. One reason for the decline is the decreasing likelihood of the US SEC giving the green light to an Ether spot ETF by May.

Additionally, the crypto market was looking very hot earlier this month, with long traders paying annual funding gains of over 100% to keep their bullish perpetual futures bets open. Such a one-sided build-up of leverage on the bullish side often foreshadows a price correction.

Investors will now keep a close eye on Wednesday’s Federal Reserve rate decision, followed by Chairman Jerome Powell’s press conference.

“This coming week, we will have a Fed rate decision after Powell’s press conference. This will give us more information about whether the Fed is still looking at a rate cut this year. “The strong economy and higher-than-expected inflation remain reasons for the Fed to remain accommodative without further pressure,” said Greg Magadini, director of derivatives at Amberdata.

Both the dollar index and US Treasury yields have recently reached higher levels due to stagnant consumer price and producer price indices, which have reduced the appeal of risk assets, including emerging technologies like cryptocurrencies.

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