Why is Bitcoin price down today?

The bullish momentum that propelled Bitcoin (BTC) to an all-time high of $73,835 on March 14 is waning. Bitcoin is down 8.3% from the all-time high on March 18. 

The contraction in Bitcoin price comes as some investors believe the BTC market is overheated after spot ETF approval.

Bitcoin price. Source: TradingView

Let’s take a closer look at the factors impacting Bitcoin price today.

Bitcoin is in a pre-halving retrace

Some analysts believe that Bitcoin is at the beginning of the pre-halving phase that historically follows a certain pattern. Similar to previous halvings, BTC’s price appears to be following the five phases of the Bitcoin halving.

The timing of the pre-halving drawdown coincides with the upcoming Federal Open Market Committee (FOMC), which will conclude on March 20.

An X social network post from crypto trader and independent analyst Rekt Capital suggested that the ongoing price action is part of a pre-halving retrace, which has seen BTC dip by 38% and 20% during the 2016 and 2020 halving cycles.

Pre-halving retrace. Source: Rekt Capital on X

Bitcoin liquidations ramp up

A sharp movement in the Bitcoin futures market can be noted by looking at liquidations. The timing of the long liquidations coincided with the elevated volatility. In a 24-hour period on March 18, over $40 million of long positions were liquidated. Bitcoin long liquidations spiked within 4 hours to over $15 million on the same day.

Bitcoin liquidations. Source: Coinglass

When BTC longs are liquidated without buying pressure from traders, Bitcoin price is negatively affected. Bitcoin trading volumes dropped over $25 billion from the March 5 year-to-date peak of $45 billion in daily activity.

Bitcoin trading volume. Source: Newhedge

Related: Game firm’s stock triples after it buys Bitcoin, Hong Kong’s in-kind BTC ETF: Asia Express

The drop in exchange trading volume comes as spot selling continues to pressure Bitcoin price.

Short-term holders ticking up

In addition to trading volume decreasing more than half from year-to-date highs, long-term holders are de-risking and profit-taking. The most recent buyers of Bitcoin seem to be…

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