Bitcoin BTC/USD experienced a downturn, dropping to as low as $66,952 early Friday morning. The decline comes after the latest U.S. economic data, raising concerns about persistent inflation.
What Happened: The price of Bitcoin, as recorded by CoinMarketCap, fell swiftly from highs of $71,200, dropping over just a few hours. At the time of writing, there were no signs of a significant recovery. February’s U.S. Producer Price Index (PPI) aligns with other economic indicators, pressuring the Federal Reserve to act.
Pressure Factors: With the inflation data out, speculation now centers on the Fed maintaining higher interest rates for longer. Additionally, recurring market patterns suggest Bitcoin dips during U.S. market openings, potentially contributing to the current price movement.
See Also: Dogecoin HODLERs Are Beating Shiba Inu With 57% Landing In Profits, IntoTheBlock Data Reveals
What’s The Buzz? The cryptocurrency community reacted strongly to Bitcoin’s 8% plunge. Investor Adam Cochran explained market arbitrage mechanisms in response to the dip, highlighting potential profitability for short-term leveraged positions.
"If BTC is down 8% on the day, and below the closing price on the spot ETF, then it’s going to get arb’d hard back up in the market hours. Perps can get washed, but, the Aave borrow rate on USDC is 15%, so to buy spot BTC for 12 hours on leverage is 0.02% So if you think the price goes back up more than that by market open, you win,” he said on X.
The sentiment within the cryptocurrency community remained somewhat optimistic despite the decline. The saying “buy the dip” gained traction, indicating that many still see the potential for recovery.
A tweet by @plan_marcus advised newer investors to consider the current trends as part of the cryptocurrency journey, advocating for the “HODL” (hold on for dear life) approach.
Price Action: At the time of writing, the price of Bitcoin was $67,857, down 8% in the last 24 hours, according to data from Benzinga Pro.
Read Next: Here’s How Much You Should Invest In Shiba Inu Today For A $1M Payday If SHIB Hits 1 Cent?
Photo via Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
