Bitcoin has decreased by nearly 5%, reaching $65,000 for the first time in a week, as the overall crypto market capitalization dropped 7%.
Ethereum’s price has also experienced liquidation, as the largest altcoin dropped 8.5% in 24 hours. According to Coinglass, more than 277,000 traders liquidated assets worth $877.79 million in 24 hours.
The BTC decline is likely being driven by a pre-halving pullback and miner capitulation. There is a familiar anticipation that the halving will lead to a larger bull cycle for Bitcoin. A pullback generally occurs when traders start taking profits close to the halving date, anticipating a short-term peak before the event.
Before the last halving in 2020, a notable pullback occurred about a week before the event, similar to the latest price movements.
In anticipation of the halving event, many miners stopped BTC mining as the difficulty and operational costs increased. In particular, this week, the difficulty of Bitcoin mining reached a record high.
Bitcoin’s network has built-in difficulty adjustments to maintain a consistent block time, which can compensate for changes in total hashing power. When miners capitulate, the total hashing power declines, eventually leading the network to adjust the difficulty downward, making mining more accessible and potentially more profitable for remaining miners.
However, recent liquidation could also be driven by investor skepticism. Maraton Digital earlier this week predicted that this year’s halving might not have any explosive impact on BTC price, as the token already reached its peak early due to the significant inflows from Bitcoin ETFs.