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Bitcoin records biggest daily loss since FTX exchange collapse

registered Bitcoin (BTC) This is its biggest daily loss since November 2022. The leading digital currency fell more than 8% to below $62,000 on Tuesday.

Bitcoin BTC daily price chart Source: tradingview
Bitcoin BTC Daily Price Chart Source: commercial view

This represents the largest single-day percentage decline (UTC time) since FTX Stock Market Collapse Which was the third largest stock exchange at the time.

This sharp decline is due to several factors, the most important of which is the outflow of huge investments from Bitcoin futures ETFs.

Preliminary data released by investment firm Farside showed a net outflow of $326 million from Bitcoin ETFs on Tuesday, the highest percentage ever recorded.

This comes a day after a record $643 million outflow from Bitcoin investment fund Grayscale.

And he wrote Analyst Alex Krueger on Twitter: “Causes of the collapse, in order of importance:

1- Excessive leverage (futures financing is an influencing factor).

2- Negative impact of Ethereum on the market (market expectations that the US Securities and Exchange Commission would refuse to approve an Ethereum ETF

3- Negative flows towards Bitcoin ETFs (note, data is delayed by one day).

4- The madness of speculation on the Solana currency (it exceeded expectations).”

On the other hand, step back Ethereum Price (ETH) to $3,130 after hitting a high of $4,000 following its recent upgrade last week.

. Part of this decline is due to the diminishing likelihood that the U.S. Securities and Exchange Commission will approve a dollar-denominated Ethereum ETF by May.

Bitcoin Price and Federal Reserve Meeting

Additionally, there were signs of the crypto market heating up earlier this month. Long traders were paying annual funding rates above 100% to maintain their bullish bets on perpetual futures contracts.

This type of unilateral leverage buildup typically heralds sharp price corrections.

This drop comes as investors await the US Federal Reserve's decision on interest rates on Wednesday. Which will be followed by a press conference by the President of the Council, Jerome Powell.

This conference should provide additional clarification on the directions of American monetary policy decision-makers. And while he sees more rate cuts on the horizon this year, especially as the economy remains strong and inflation rates rise more than expected.

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